It has been about a month since the last earnings report for Royal Caribbean (RCL Quick QuoteRCL - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Royal Caribbean due for a breakout? 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 Q2 Earnings & Revenues Beat Estimates

Royal Caribbean reported second-quarter 2026 results, with adjusted earnings and revenues beating the Zacks Consensus Estimate. The top line increased, but the bottom line declined on a year-over-year basis.

The company reported second-quarter 2026 adjusted earnings of $4.21 per share, which surpassed the Zacks Consensus Estimate of $3.97 by 6.1%. However, adjusted earnings declined 3.9% from $4.38 in the year-ago quarter.

Revenues totaled $4.83 billion, beating the consensus mark of $4.81 billion by 0.5%. The top line increased 6.5% year over year. Results benefited from strong close-in demand, lower-than-expected costs and favorable joint-venture performance. Occupancy remained healthy at 110.2%.

RCL Sustains Demand Momentum at Record Pricing

Royal Caribbean’s demand commentary remained constructive. Booking volumes were above year-ago levels, while the company remained booked at record prices. Load factors also stayed robust across its vacation portfolio.

Net yields increased 1.9% on an as-reported basis and 1.2% in constant currency. The metric exceeded management’s guidance, primarily reflecting better-than-expected close-in demand. Capacity increased 4.9% year over year, while the number of passengers carried rose 6.4% to nearly 2.4 million.

Royal Caribbean Gains From Tickets and Onboard Spend

The second-quarter top line advanced on strength across the two primary revenue streams. Passenger ticket revenues increased 4.5% year over year to $3.34 billion from $3.20 billion. The increase reflected capacity growth, healthy pricing and continued demand for the company’s differentiated cruise experiences. Our model projected second-quarter passenger ticket revenues to be $3.34 billion.

Onboard and other revenues rose 11.1% to $1.49 billion from $1.34 billion in the prior-year quarter. Management highlighted strong guest engagement and demand for onboard and destination experiences. Product enhancements and more targeted pre-cruise engagement also supported guest spending. Our model projected second-quarter onboard & other revenues to be $1.48 billion.

Royal Caribbean Posts Lower Q2 Profitability

Operating income declined 1.7% year over year to $1.31 billion from $1.33 billion, as operating expense growth exceeded the increase in revenues. Net income attributable to Royal Caribbean decreased 6.8% to $1.13 billion from $1.21 billion.

Adjusted net income fell 6% to $1.13 billion from $1.20 billion. Adjusted EBITDA declined 1.1% to $1.83 billion from $1.85 billion. Adjusted EBITDA margin contracted to 37.9% from 40.8% in the prior-year quarter.

RCL’s Costs Rise as Fuel and Payroll Increase

Total cruise operating expenses increased 11.6% year over year to $2.55 billion. Payroll and related expenses climbed 23.1% to $405 million, while fuel costs increased 27.2% to $355 million.

Food expenses rose 6.5% to $262 million, while other operating expenses increased 9.6% to $615 million. Marketing, selling and administrative expenses were $513 million compared with $508 million a year ago. Net cruise costs excluding fuel per available passenger cruise day increased 4.4% as reported and 3.9% in constant currency.

RCL Generates Higher Cash Flow, Returns Capital

For the first six months of 2026, net cash provided by operating activities increased 9.5% year over year to $3.69 billion.

During the second quarter, Royal Caribbean returned more than $600 million to its shareholders. This included $199 million of share repurchases and $404 million of dividend payments. The company had $805 million remaining under its current repurchase authorization.

As of June 30, 2026, cash and cash equivalents were $875 million compared with $825 million at the end of 2025. Total liquidity was $6.9 billion, including available capacity under the company’s revolving credit facilities.

Royal Caribbean Raises 2026 Earnings Outlook

For the third quarter of 2026, Royal Caribbean expects adjusted earnings of $6.26-$6.36 per share. Total revenues are projected to increase 8%, while net yields are expected to remain approximately flat on both an as-reported and constant-currency basis.

The company raised its full-year adjusted earnings guidance to $17.73-$17.87 per share from the prior projection of $17.10-$17.50. The updated range represents expected growth of 14% year over year.

Royal Caribbean expects 2026 revenues to rise 9%. Net yields are projected to increase 2.35%-2.85% as reported and 1.75%-2.25% in constant currency. Capacity is expected to grow 6.6%, while capital expenditures are anticipated to be approximately $4.7 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

VGM Scores

At this time, Royal Caribbean has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% 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 trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Royal Caribbean has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.