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Likely Coronavirus Impact on Royal Caribbean (RCL) Q1 Earnings

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Royal Caribbean Cruises Ltd. (RCL - Free Report) is likely to register decline in the bottom line when it reports first-quarter 2020 results. In the last reported quarter, the company delivered a positive earnings surprise of 0.7%.

Q1 Estimates

The Zacks Consensus Estimate for first-quarter is pegged at a loss of 58 cents, against earnings of $1.31 per share in the prior year quarter. Over the past 30 days, the company’s earnings estimates have witnessed sharp downward revisions. The Zacks Consensus Estimate for revenues stands at $2,139 million, indicating a decline of 12.3% from the prior-year quarter.

Factors to Note

Decline in passenger ticket revenues, and onboard and other revenues are anticipated to get reflected in the company’s first-quarter results. Both the metrics might have been negatively impacted by the coronavirus pandemic. Travel warnings and cruise cancellations may have hurt the performance in the quarter to be reported. The Zacks Consensus Estimate for passenger ticket revenues stands at $1,574 million, indicating a decrease 7.9% from the prior-year quarter. Moreover, the consensus mark for the onboard and other revenues is pegged at $688 million, suggesting a decline of 5.7% from the year-ago quarter.

Moreover, travel ban to Cuba and increase in costs are likely to get reflected in the first-quarter performance. Notably, the company anticipates itinerary changes owing to Cuba to impact yields in first-half 2020.

Despite the company’s strong fundamentals and growth prospect, the coronavirus pandemic has been taking a toll on the company’s performance.

Royal Caribbean Cruises Ltd. Price and EPS Surprise

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. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Royal Caribbean has an Earnings ESP of -29.84%.

Zacks Rank: The company has a Zacks Rank #3.

Stock With Favorable Combinations 

Here are a few stocks from the Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

GP Strategies Corporation has an Earnings ESP of +58.33% and a Zacks Rank #3, at present.

BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) currently has an Earnings ESP of +8.50% and a Zacks Rank #2.

Activision Blizzard, Inc. currently has an Earnings ESP of +10.39% and a Zacks Rank #2.

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