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Royal Caribbean (RCL) Q4 Earnings & Revenues Beat Estimates

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Royal Caribbean Cruises Ltd. (RCL - Free Report) has reported better-than-expected results for the fourth quarter of 2018. Adjusted earnings of $1.53 per share surpassed the Zacks Consensus Estimate of $1.51 by 1.3% and increased 14.2% year over year, backed by higher revenues. The bottom-line figure was also higher than $1.45-$1.50 anticipated by the company.

Total revenues of $2,332.3 million surpassed the consensus mark of $2,313 million and increased 16.4% from the year-ago quarter. This upside can be attributed to higher passenger ticket as well as onboard and other revenues.

Quarterly Highlights

Passenger ticket revenues jumped 16.3% to $1,651.6 million, and onboard and other revenues increased 16.5% to $680.7 million.

On a constant-currency basis, net yields rose 6.8% year over year. This improvement was backed by strong demand for core products and better-than-expected onboard spend.

Net cruise costs (NCC), excluding fuel, was up 15.3% on a constant-currency basis, higher than management’s expectation of 6-6.5% increase.

Total cruise operating expenses were $1,360.4 million, up 18.7% on a year-over-year basis. The company witnessed rise in operating expenses at Payroll and related, Onboard and other, Commissions, transportation and other, and other operating segments. Further, fuel and food expenses were up during the quarter under review.

Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise

 

2018 Highlights

For 2018, adjusted earnings per share were $8.86, higher than the guidance provided in the middle of January 2018. This reflects 17.5% year-over-year growth in adjusted earnings per share.

Net yields grew 4.4% in constant currency, owing to strong demand for core products and better-than-expected onboard spend. NCC, excluding fuel, were up 4.1% in constant currency.

1Q19 Guidance

For the first quarter of 2019, Royal Caribbean expects adjusted earnings per share of $1.10. The Zacks Consensus Estimate for the quarter is currently pegged at $1.15.

Constant-currency net yields are projected to increase by 7.5-8%. NCC, excluding fuel, is likely to be up 10% on a constant-currency basis.

2019 Outlook

For 2019, Royal Caribbean is anticipating earnings of $9.75-$10 per share. The Zacks Consensus Estimate for the year stands at $9.92. The company expects net yields to lie between 6.5% and 8.5% on a constant-currency basis.

NCC, excluding fuel, is expected to be up 8.5-9% on a constant-currency basis.

Zacks Rank & Peer Release

Royal Caribbean currently carries a Zacks Rank #3 (Hold).

Carnival Corporation (CCL - Free Report) reported mixed fourth-quarter fiscal 2018 results, wherein earning surpassed estimates but revenues lagged the same. Earnings were 70 cents per share, which outpaced the Zacks Consensus Estimate of 69 cents and improved 11.1% year over year.

Key Picks

Two better-ranked stocks from the industry are SeaWorld Entertainment and Marcus Corporation (MCS - Free Report) , each currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings for SeaWorld and Marcus in 2018 are expected to grow 138.1% and 24%, respectively.

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