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What's in the Cards for Royal Caribbean's (RCL) Q1 Earnings?

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Royal Caribbean Group (RCL - Free Report) is scheduled to report first-quarter 2021 results on Apr 29. In the last reported quarter, the company delivered an earnings surprise of 0.40%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the company’s first-quarter bottom line is pegged at a loss of $4.55 per share. In the prior-year quarter, the company reported loss per share of $1.48. The consensus mark for revenues is at $35.8 million, suggesting a decline of 98.3% from the year-ago quarter’s reported figure.

Factors at Play

Royal Caribbean’s first-quarter results are likely to have been adversely impacted by the coronavirus pandemic. Notably, cancellations of cruises due to the ongoing crisis and change in booking patterns are likely to get reflected in the company’s results for the to-be-reported quarter. Moreover, dismal passenger ticket revenues on account of the company’s limited cruise operations as well as lower onboard and other revenues are likely to get reflected in first-quarter top line.

Royal Caribbean Cruises Ltd. Price and EPS Surprise

 

Royal Caribbean Cruises Ltd. Price and EPS Surprise

Royal Caribbean Cruises Ltd. price-eps-surprise | Royal Caribbean Cruises Ltd. Quote

 

The Zacks Consensus Estimate for passenger ticket revenues and onboard and other revenues is currently pegged at $25.8 million and $18.2 million, respectively, indicating a decline of 98.1% and 97.2% from the prior-year quarter’s levels.

Moreover, quarterly earnings are likely to have been negatively impacted by cash burn. The company estimates cash burn between $250 million to $290 million per month for the quarter. This includes ongoing ship operating expenses, administrative expenses, debt service, hedging costs and anticipated necessary CapEx.

However, phased resumption of operations coupled with Lift & Shift and Future Cruise Credit programs is likely to have aided the company in the to-be-reported quarter. This along with easing of travel restrictions along with the pace of the distribution of vaccines are likely to have influenced the pace of recovery in the first quarter.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for Royal Caribbean this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Earnings ESP: Royal Caribbean has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported:

Choice Hotels International, Inc. (CHH - Free Report) has a Zacks Rank #3 and an Earnings ESP of +17.47%.

Caesars Entertainment, Inc. (CZR - Free Report) has a Zacks Rank #3 and an Earnings ESP of +9.32%.

Planet Fitness, Inc. (PLNT - Free Report) has a Zacks Rank #3 and an Earnings ESP of +23.53%.

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