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Why Is Royal Caribbean (RCL) Up 16% Since Last Earnings Report?
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A month has gone by since the last earnings report for Royal Caribbean (RCL - Free Report) . Shares have added about 16% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Royal Caribbean due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Royal Caribbean Q3 Earnings & Revenues Top Estimates
Royal Caribbean reported impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top-and-bottom line increased on a year-over-year basis.
During the quarter, the company exceeded its guidance expectations, driven by stronger pricing on close-in demand, continued growth in onboard revenues and reduced costs due to timing factors. The company has raised its outlook for 2024 and reported elevated demand patterns heading into 2025. Despite a tough comparison in yields, RCL’s balanced approach — focusing on moderate capacity and yield growth alongside disciplined cost management — positions it well for growth.
RCL’s Q3 Earnings & Revenues
During the third-quarter 2024, the company reported an adjusted EPS of $5.20, beating the Zacks Consensus Estimate of $5.05. In the prior-year quarter, RCL reported an adjusted EPS of $3.85.
Quarterly revenues of $4.88 billion outpaced the consensus mark of $4.86 billion. In the prior-year quarter, RCL reported revenues of $4.16 billion. A rise in close-in demand (at higher prices) and continued strength in onboard revenues added to the positives.
Quarterly Highlights
In the third-quarter 2024, passenger ticket revenues amounted to $3.47 billion, up from $2.94 billion in the prior-year quarter. Our estimate for passenger ticket revenues was $3.3 billion. Onboard and other revenues increased to $1.41 billion, up from 1.21 billion reported in the year-ago quarter. Our estimate for the metric was $1.4 billion.
Total cruise operating expenses amounted to $2.39 billion, up 11.9% year over year. Our estimate for the metric was $2.29 billion. Net yields rose 7.9% on a constant-currency (cc) and reported basis compared with third-quarter 2023 levels. Net cruise costs, excluding fuel per APCD, rose 4% on a reported basis and cc compared with third-quarter 2023 figures.
Other Financial Information
As of Sept. 30, 2024, RCL reported cash and cash equivalents of $418 million compared with $391 million as of June 30, 2024. As of Sept. 30, long-term debt was $18.97 billion compared with $19.8 billion as of June 30, 2024.
Booking Update
During the third quarter, the company reported solid booking volumes across all key itineraries. It also stated a rise in consumer spending onboard and pre-cruise purchases (exceeding 2023 levels) driven by higher participation at increased prices. In third-quarter 2024, load factors were 111%.
The company is highly optimistic about the demand and pricing landscape for 2025. The company's new ships, existing fleet and private destinations have received a strong market response, paving the way for yield growth in 2025. As of Sept. 30, 2024, RCL had $5.32 billion in customer deposits compared with $5.31 billion in the prior-year period.
RCL’s Q4 & 2024 Outlook
In the fourth-quarter 2024, RCL expects depreciation and amortization expenses of $410-$420 million. Net interest expenses (excluding loss on extinguishment of debt) are projected between $250 million and $260 million. Management estimates adjusted EPS of $1.40-$1.45.
For 2024, the company expects depreciation and amortization expenses to be in the range of $1,590-$1,600 million compared with the previous expectation of $1,600-$1,610 million. Net interest expenses (excluding loss on extinguishment of debt) for the year are expected to be in the range of $1,105-$1,115 million, down from the earlier guidance of $1,130-$1,140 million.
The company expects net yields to increase by 10.9%-11.4% on a reported basis and 10.8%-11.3% at cc, on a year-over-year basis. Earlier, the company projected net yields to rise 10.4%-10.9% (on a reported and constant-currency basis) year over year. For 2024, the company anticipates adjusted EPS in the range of $11.57-$11.62, up from the prior projection of $11.35-$11.45. The Zacks Consensus Estimate for 2024 earnings is pegged at $11.62.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -5.52% due to these changes.
VGM Scores
Currently, Royal Caribbean has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Royal Caribbean has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Royal Caribbean (RCL) Up 16% Since Last Earnings Report?
A month has gone by since the last earnings report for Royal Caribbean (RCL - Free Report) . Shares have added about 16% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Royal Caribbean due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Royal Caribbean Q3 Earnings & Revenues Top Estimates
Royal Caribbean reported impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top-and-bottom line increased on a year-over-year basis.
During the quarter, the company exceeded its guidance expectations, driven by stronger pricing on close-in demand, continued growth in onboard revenues and reduced costs due to timing factors. The company has raised its outlook for 2024 and reported elevated demand patterns heading into 2025. Despite a tough comparison in yields, RCL’s balanced approach — focusing on moderate capacity and yield growth alongside disciplined cost management — positions it well for growth.
RCL’s Q3 Earnings & Revenues
During the third-quarter 2024, the company reported an adjusted EPS of $5.20, beating the Zacks Consensus Estimate of $5.05. In the prior-year quarter, RCL reported an adjusted EPS of $3.85.
Quarterly revenues of $4.88 billion outpaced the consensus mark of $4.86 billion. In the prior-year quarter, RCL reported revenues of $4.16 billion. A rise in close-in demand (at higher prices) and continued strength in onboard revenues added to the positives.
Quarterly Highlights
In the third-quarter 2024, passenger ticket revenues amounted to $3.47 billion, up from $2.94 billion in the prior-year quarter. Our estimate for passenger ticket revenues was $3.3 billion. Onboard and other revenues increased to $1.41 billion, up from 1.21 billion reported in the year-ago quarter. Our estimate for the metric was $1.4 billion.
Total cruise operating expenses amounted to $2.39 billion, up 11.9% year over year. Our estimate for the metric was $2.29 billion. Net yields rose 7.9% on a constant-currency (cc) and reported basis compared with third-quarter 2023 levels. Net cruise costs, excluding fuel per APCD, rose 4% on a reported basis and cc compared with third-quarter 2023 figures.
Other Financial Information
As of Sept. 30, 2024, RCL reported cash and cash equivalents of $418 million compared with $391 million as of June 30, 2024. As of Sept. 30, long-term debt was $18.97 billion compared with $19.8 billion as of June 30, 2024.
Booking Update
During the third quarter, the company reported solid booking volumes across all key itineraries. It also stated a rise in consumer spending onboard and pre-cruise purchases (exceeding 2023 levels) driven by higher participation at increased prices. In third-quarter 2024, load factors were 111%.
The company is highly optimistic about the demand and pricing landscape for 2025. The company's new ships, existing fleet and private destinations have received a strong market response, paving the way for yield growth in 2025. As of Sept. 30, 2024, RCL had $5.32 billion in customer deposits compared with $5.31 billion in the prior-year period.
RCL’s Q4 & 2024 Outlook
In the fourth-quarter 2024, RCL expects depreciation and amortization expenses of $410-$420 million. Net interest expenses (excluding loss on extinguishment of debt) are projected between $250 million and $260 million. Management estimates adjusted EPS of $1.40-$1.45.
For 2024, the company expects depreciation and amortization expenses to be in the range of $1,590-$1,600 million compared with the previous expectation of $1,600-$1,610 million. Net interest expenses (excluding loss on extinguishment of debt) for the year are expected to be in the range of $1,105-$1,115 million, down from the earlier guidance of $1,130-$1,140 million.
The company expects net yields to increase by 10.9%-11.4% on a reported basis and 10.8%-11.3% at cc, on a year-over-year basis. Earlier, the company projected net yields to rise 10.4%-10.9% (on a reported and constant-currency basis) year over year. For 2024, the company anticipates adjusted EPS in the range of $11.57-$11.62, up from the prior projection of $11.35-$11.45. The Zacks Consensus Estimate for 2024 earnings is pegged at $11.62.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -5.52% due to these changes.
VGM Scores
Currently, Royal Caribbean has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Royal Caribbean has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.