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Royal Caribbean (RCL) Tops Q2 Earnings Estimates, Raises '23 View
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Royal Caribbean Cruises Ltd. (RCL - Free Report) reported second-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
RCL benefited from robust demand, strong pricing (on closer-in demand) and solid onboard spending. Following the results, the stock has gained 8% in the pre-market trading session.
Q2 Earnings & Revenues
During the second quarter of 2023, the company reported an adjusted earnings per share (EPS) of $1.82, beating the Zacks Consensus Estimate of $1.58. In the prior-year quarter, RCL had incurred an adjusted loss per share of $2.08.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
Quarterly revenues of $3,523 million outpaced the consensus mark of $3,378 million. In the prior-year quarter, RCL reported revenues of $2,184.2 million. The upside was primarily driven by strong ticket pricing (from North America and Europe itineraries) and strength in onboard revenues.
Quarterly Highlights
In the second quarter of 2023, passenger ticket revenues amounted to $2,443.5 million, up from $1,418.2 million in the prior-year quarter. Our estimate for passenger ticket revenues was $2,004.8 million.
Onboard and other revenues increased to $1,079.5 million from $766 million reported in the year-ago quarter. Our estimate for Onboard and other revenues was $1,281.3 million.
Total cruise operating expenses amounted to $1,954.9 million, up 16.4% year over year. Our estimate for the metric was $1,992.7 million.
On a constant-currency basis, net yields rose 12.9% compared with the second-quarter 2019 levels. Net cruise costs, excluding fuel per APCD, rose 8.6% on a reported basis and 9% on a constant-currency basis. Improvement in net cruise costs was in comparison to the second-quarter 2019 figures.
Other Financial Information
As of Jun 30, RCL had cash and cash equivalents of $726.4 million compared with $1,226.9 million as of Mar 31, 2023. As of Jun 30, long-term debt was $18.7 billion compared with $19.4 billion as of Mar 31, 2023.
Booking Update
Booking volumes in the second quarter were much higher than in the same period in 2019. The company reported solid bookings with respect to North America and European sailings. The company stated a rise in consumer spending onboard and pre-cruise purchases. It revealed that the metrics surpassed 2019 levels, courtesy of greater participation at higher prices. In second-quarter 2023, load factors were 105%.
As of Jun 30, RCL had $5.7 billion in customer deposits compared with $5.3 billion reported in the previous quarter.
2023 Outlook
In the third quarter of 2023, Royal Caribbean expects depreciation and amortization expenses of $360-$370 million. Net interest expenses (excluding loss on extinguishment of debt) is estimated between $295-$305 million down from the previous projection of $305-$315 million.
Management estimates adjusted EPS of $3.38-$3.48. The Zacks Consensus Estimate is pegged at $1.58.
For 2023, RCL expects depreciation and amortization expenses between $1,465 million and $1,475 million. Net interest expenses (excluding loss on extinguishment of debt) are projected at $1,272-1,282 million, down from the earlier guidance of $1,290-1,300 million.
Adjusted EBITDA is expected to surpass the 2019 reported levels. Adjusted EPS is anticipated to be $6-$6.20, up from the prior projection of $4.40-$4.80. The Zacks Consensus Estimate for 2023 earnings is pegged at $4.73.
Net yields are anticipated to increase 11.5-12% (on a reported and constant-currency basis) compared with 2019 levels. Earlier, the company had projected net yields to grow 6.25-7.25% (on a reported basis) and 6.75%-7.75% (at constant currency) compared with 2019 levels.
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 44.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggest an increase of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 21%, on average. Shares of LYV have surged 182.9% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales and EPS indicates a rise of 7.2% and 142%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have increased 66.6% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 34% and 89.3%, respectively, from the year-ago period’s levels.
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Royal Caribbean (RCL) Tops Q2 Earnings Estimates, Raises '23 View
Royal Caribbean Cruises Ltd. (RCL - Free Report) reported second-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
RCL benefited from robust demand, strong pricing (on closer-in demand) and solid onboard spending. Following the results, the stock has gained 8% in the pre-market trading session.
Q2 Earnings & Revenues
During the second quarter of 2023, the company reported an adjusted earnings per share (EPS) of $1.82, beating the Zacks Consensus Estimate of $1.58. In the prior-year quarter, RCL had incurred an adjusted loss per share of $2.08.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
Royal Caribbean Cruises Ltd. price-consensus-eps-surprise-chart | Royal Caribbean Cruises Ltd. Quote
Quarterly revenues of $3,523 million outpaced the consensus mark of $3,378 million. In the prior-year quarter, RCL reported revenues of $2,184.2 million. The upside was primarily driven by strong ticket pricing (from North America and Europe itineraries) and strength in onboard revenues.
Quarterly Highlights
In the second quarter of 2023, passenger ticket revenues amounted to $2,443.5 million, up from $1,418.2 million in the prior-year quarter. Our estimate for passenger ticket revenues was $2,004.8 million.
Onboard and other revenues increased to $1,079.5 million from $766 million reported in the year-ago quarter. Our estimate for Onboard and other revenues was $1,281.3 million.
Total cruise operating expenses amounted to $1,954.9 million, up 16.4% year over year. Our estimate for the metric was $1,992.7 million.
On a constant-currency basis, net yields rose 12.9% compared with the second-quarter 2019 levels. Net cruise costs, excluding fuel per APCD, rose 8.6% on a reported basis and 9% on a constant-currency basis. Improvement in net cruise costs was in comparison to the second-quarter 2019 figures.
Other Financial Information
As of Jun 30, RCL had cash and cash equivalents of $726.4 million compared with $1,226.9 million as of Mar 31, 2023. As of Jun 30, long-term debt was $18.7 billion compared with $19.4 billion as of Mar 31, 2023.
Booking Update
Booking volumes in the second quarter were much higher than in the same period in 2019. The company reported solid bookings with respect to North America and European sailings. The company stated a rise in consumer spending onboard and pre-cruise purchases. It revealed that the metrics surpassed 2019 levels, courtesy of greater participation at higher prices. In second-quarter 2023, load factors were 105%.
As of Jun 30, RCL had $5.7 billion in customer deposits compared with $5.3 billion reported in the previous quarter.
2023 Outlook
In the third quarter of 2023, Royal Caribbean expects depreciation and amortization expenses of $360-$370 million. Net interest expenses (excluding loss on extinguishment of debt) is estimated between $295-$305 million down from the previous projection of $305-$315 million.
Management estimates adjusted EPS of $3.38-$3.48. The Zacks Consensus Estimate is pegged at $1.58.
For 2023, RCL expects depreciation and amortization expenses between $1,465 million and $1,475 million. Net interest expenses (excluding loss on extinguishment of debt) are projected at $1,272-1,282 million, down from the earlier guidance of $1,290-1,300 million.
Adjusted EBITDA is expected to surpass the 2019 reported levels. Adjusted EPS is anticipated to be $6-$6.20, up from the prior projection of $4.40-$4.80. The Zacks Consensus Estimate for 2023 earnings is pegged at $4.73.
Net yields are anticipated to increase 11.5-12% (on a reported and constant-currency basis) compared with 2019 levels. Earlier, the company had projected net yields to grow 6.25-7.25% (on a reported basis) and 6.75%-7.75% (at constant currency) compared with 2019 levels.
Zacks Rank & Key Picks
Royal Caribbean carries a Zacks Rank #2 (Buy).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 44.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggest an increase of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 21%, on average. Shares of LYV have surged 182.9% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales and EPS indicates a rise of 7.2% and 142%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have increased 66.6% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 34% and 89.3%, respectively, from the year-ago period’s levels.