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What's in the Cards for Royal Caribbean's (RCL) Q2 Earnings?

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Royal Caribbean Group (RCL - Free Report) is scheduled to report second-quarter 2021 results on Aug 4, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 2.2%.

Q2 Estimates

The Zacks Consensus Estimate for the company’s second-quarter bottom line is pegged at a loss of $4.26 per share. In the prior-year quarter, the company reported a loss per share of $6.13. The consensus mark for revenues stands at $163.2 million, suggesting a decline of 7.1% from the year-ago reported figure.

Factors to Note

Royal Caribbean’s second-quarter results are likely to reflect the adverse impacts of coronavirus pandemic. Cancellations of cruises due to the ongoing crisis and change in booking patterns might have weighed on the to-be-reported quarter’s performance. Bookings for 2021 are likely to have declined significantly due to the pandemic. It expects to report net loss on both a GAAP and adjusted basis for the second quarter and 2021 fiscal year. The Zacks Consensus Estimate for passenger ticket revenues is currently pegged at $88 million, indicating a decline of 21.6% from the prior-year quarter. The consensus mark for onboard and other revenues is pegged at $70 million, almost flat year over year.

Cash burn may have affected the to-be-reported quarter’s performance. The company estimates cash burn between $300 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 of cruise operation may have favored the company in the to-be-reported quarter. In June, the company resumed sailing from the United States with its state-of-the-art, luxury ship — Celebrity Edge. This was the first cruise to sail from an U.S. port after suspension of services for more than a year due to the coronavirus pandemic.

What the Zacks Model Unveils

Our proven model does not conclusively 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 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.

Stocks With Favorable Combinations

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 deliver an earnings beat this time around.

Penn National Gaming, Inc. (PENN - Free Report) has an Earnings ESP of + 26.32% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hyatt Hotels Corporation (H - Free Report) has an Earnings ESP of +12.24% and a Zacks Rank #3.

Accel Entertainment, Inc. (ACEL - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #2.