Back to top

Image: Bigstock

Royal Caribbean (RCL) Q2 Earnings & Revenues Miss Estimates

Read MoreHide Full Article

Royal Caribbean Cruises Ltd. (RCL - Free Report) reported second-quarter 2021 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The top line declined year over year. Following the results, the company’s shares are down 1.7% in pre-market trading session.

The company continues to focus on resumption of services. It is already operating 29 ships across its five brands, representing 42% of capacity. By the end of August, Royal Caribbean anticipates to operate 36 ships, which represent more than 60% of its capacity. It expects to operate at 80% of its capacity by the end of 2021.

Richard D. Fain, chairman and CEO said, “We're thrilled to be back on the water at accelerated speed in the US and elsewhere.  After 16 months of being at a virtual standstill and another painful financial result this quarter, the flywheel is clearly picking up momentum.”

Q2 Earnings & Revenues

The company reported adjusted loss per share of $5.06, wider than the Zacks Consensus Estimate of a loss of $4.26. In the prior-year quarter, it had reported adjusted loss per share of $6.13 per share.

Quarterly revenues of $50.9 million lagged the consensus mark of $163 million. The top line plunged 70% year over year. The company’s results have been negatively impacted by coronavirus pandemic.

The average monthly cash burn for the second quarter was roughly $330 million.

Quarterly Highlights

During second-quarter 2021, passenger ticket revenues fell 78.7% year over year to $22.8 million, while onboard and other revenues declined to $28.1 million from $68.6 million reported in the prior-year quarter.

Total cruise operating expenses were $424.8 million compared with $680.4 million at the end of second-quarter 2020.

Other Financial Information

As of Jun 30, 2021, the company had cash and cash equivalents of approximately $4,250.4 million compared with $3,684.5 million as on Dec 31, 2020. As of Jun 30, the company’s long-term debt was nearly $20.1 billion compared with $18 billion as of Dec 31, 2020.

The company announced that as of Jun 30, 2021, the anticipated debt maturities for the remainder of 2021 and 2022 were $21 million and $2.2 billion, respectively.

2021 Guidance & Booking Update

The company has withdrawn guidance as it is unable to estimate the financial losses due to the coronavirus pandemic.

The company anticipates to report net loss on both GAAP and adjusted basis for the third quarter and the fiscal 2021.

The company expects depreciation and amortization expenses in the range of $320 million to 325 million for third-quarter 2021. Net interest expenses for the third quarter are expected to be $265-$270 million. Meanwhile, capital expenditures for the remaining of 2021 are anticipated to be $900 million.

The pandemic has significantly impacted bookings for 2021. However, booking volumes have improved. During second-quarter 2021, the company received nearly 50% more bookings in comparison to the first-quarter 2021. The trend continues to improve every month.

Zacks Rank & a Stock to Consider

Royal Caribbean, which shares space with Carnival Corporation & Plc (CCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) , carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked stock worth considering in the same space includes WW International, Inc. (WW - Free Report) , that carries a Zacks Rank #2 (Buy).

WW International has a three-five-year EPS growth rate of 15%.