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Will Higher Costs Impact Royal Caribbean's (RCL) Q1 Earnings?
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Royal Caribbean Cruises Ltd. (RCL - Free Report) is scheduled to report first-quarter 2018 financial numbers on Apr 26, before the opening bell.
Last quarter, the company pulled off a positive earnings surprise of 11.7%. In fact, Royal Caribbean’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 5.9%.
What to Expect ?
The question lingering in investors’ minds now is whether Royal Caribbean will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the first quarter is pegged at 96 cents, which is lower than 99 cents in the year-ago quarter. Of late, the company’s earnings estimates have been stable. In the preceding quarter, the company’s witnessed earnings growth of 8.9% on a year-over-year basis. Meanwhile, analysts polled by Zacks expect revenues of nearly $2,046 million, up 1.9% from the prior-year quarter.
Let’s delve deeper to find out how this global cruise vacation company’s top and bottom lines will shape up in the to-be-reported quarter.
Factors at Play
Royal Caribbean’s top line in the first quarter is expected to be driven by robust book position and onboard revenues. Notably, majority of Asia-Pacific itineraries have been delivering impressive performance for a while now. In fact, each of the company’s China, Australia and Southeast Asia itineraries is booked higher than last year in load factor. Furthermore, robust demand for North America and Europe itineraries are likely to drive the company’s performance in the quarter. Royal Caribbean is benefiting from its global sourcing model, revenue management strategies and the price integrity program as well.
However, rise in costs are likely to impact the company’s earnings. Royal Caribbean expects net cruise costs, excluding fuel, to increase in the range of 1.5-2% for 2018. This improvement in the cost metric is likely driven by planned sales and marketing investments, timing of third-quarter costs and lower-than-expected APCDs due to hurricanes. Earlier, the company had stated that it envisions first-quarter adjusted earnings per share at roughly 95 cents. Constant-currency net yields are projected to increase in the band of 3-3.5%. NCC, excluding fuel, is expected to be up about 10% at constant currency.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Royal Caribbean has a Zacks Rank #2 and an Earnings ESP of +0.50%, a combination that suggests that the company is likely to beat estimates.
Other Stocks to Consider
Here are some stocks that you may also want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:
Las Vegas Sands Corp. (LVS - Free Report) has an Earnings ESP of +3.49% and a Zacks Rank of 3.
Extended Stay America has an Earnings ESP of +3.50% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Will Higher Costs Impact Royal Caribbean's (RCL) Q1 Earnings?
Royal Caribbean Cruises Ltd. (RCL - Free Report) is scheduled to report first-quarter 2018 financial numbers on Apr 26, before the opening bell.
Last quarter, the company pulled off a positive earnings surprise of 11.7%. In fact, Royal Caribbean’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 5.9%.
What to Expect ?
The question lingering in investors’ minds now is whether Royal Caribbean will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the first quarter is pegged at 96 cents, which is lower than 99 cents in the year-ago quarter. Of late, the company’s earnings estimates have been stable. In the preceding quarter, the company’s witnessed earnings growth of 8.9% on a year-over-year basis. Meanwhile, analysts polled by Zacks expect revenues of nearly $2,046 million, up 1.9% from the prior-year quarter.
Let’s delve deeper to find out how this global cruise vacation company’s top and bottom lines will shape up in the to-be-reported quarter.
Factors at Play
Royal Caribbean’s top line in the first quarter is expected to be driven by robust book position and onboard revenues. Notably, majority of Asia-Pacific itineraries have been delivering impressive performance for a while now. In fact, each of the company’s China, Australia and Southeast Asia itineraries is booked higher than last year in load factor. Furthermore, robust demand for North America and Europe itineraries are likely to drive the company’s performance in the quarter. Royal Caribbean is benefiting from its global sourcing model, revenue management strategies and the price integrity program as well.
However, rise in costs are likely to impact the company’s earnings. Royal Caribbean expects net cruise costs, excluding fuel, to increase in the range of 1.5-2% for 2018. This improvement in the cost metric is likely driven by planned sales and marketing investments, timing of third-quarter costs and lower-than-expected APCDs due to hurricanes. Earlier, the company had stated that it envisions first-quarter adjusted earnings per share at roughly 95 cents. Constant-currency net yields are projected to increase in the band of 3-3.5%. NCC, excluding fuel, is expected to be up about 10% at constant currency.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise | Royal Caribbean Cruises Ltd. Quote
Our Model Suggests a Beat
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Royal Caribbean has a Zacks Rank #2 and an Earnings ESP of +0.50%, a combination that suggests that the company is likely to beat estimates.
Other Stocks to Consider
Here are some stocks that you may also want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:
Wynn Resorts (WYNN - Free Report) has an Earnings ESP of +5.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Las Vegas Sands Corp. (LVS - Free Report) has an Earnings ESP of +3.49% and a Zacks Rank of 3.
Extended Stay America has an Earnings ESP of +3.50% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>