In this article:
Royal Caribbean Cruises Ltd. RCL is scheduled to release second-quarter 2024 results on Jul 25, 2024. The company is likely to have benefited from positive customer sentiments bolstered by resilient labor markets, stabilizing inflation and a narrowed gap to land-based vacations.
The Zacks Consensus Estimate for RCL’s second-quarter earnings per share (EPS) is pegged at $2.77, suggesting 52.2% growth from $1.82 reported in the prior-year quarter. The consensus mark has increased by 3% in the past 60 days. For quarterly revenues, the consensus mark is pegged at $4 billion, suggesting a 13.4% rise from the year-ago quarter's reported figure.
Image Source: Zacks Investment Research
Earnings Surprise History
The company has a modest earnings surprise history in the trailing four quarters, exceeding earnings expectations on each occasion. It delivered an earnings surprise of 18.3%, on average. In the last reported quarter, the company delivered an earnings surprise of 35.1%.
Image Source: Zacks Investment Research
Q2 Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Royal Caribbean this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings. But that's not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Royal Caribbean has a Zacks Rank #1 and an Earnings ESP of -0.43%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Influence RCL’s Q2 Results
Royal Caribbean’s second-quarter performance is likely to have benefitted from robust demand, courtesy of its digital initiatives, ship upgrades and enhanced product offerings. This and the strong booking and pricing environment across key itineraries, coupled with continued strength in onboard, are likely to have driven the company’s top-line in the second quarter.
Our model estimates second-quarter passenger ticket revenues to rise 6.1% year over year to $2.59 billion. We expect onboard and other revenues to increase 23.3% year over year to $1.33 billion.
Royal Caribbean is enhancing its commerce platform with new technology and artificial intelligence (AI) to improve the experience across various distribution channels, build stronger customer loyalty and reduce guest acquisition costs. It is investing in a modern digital travel platform to streamline travel planning, making it easier for guests to book vacations and expand wallet share. The initiatives are likely to have strengthened load factors and improved yields in the second quarter.
The company anticipates net yields to rise 10-10.5% (on a reported basis) and 10.2-10.7% (constant-currency basis) from 2023 levels. Our model predicts second-quarter net yields at $262 million (on a reported basis) and $263 million (constant-currency basis).
Elevated costs concerning fuel and food are likely to have hurt margins in the second quarter. Our model predicts total cruise operating costs to rise 5% year over year to $2.05 billion.
The company expects second-quarter net cruise costs (excluding fuel per APCD) to increase 5.4% (on a reported basis) and 5.5% (constant currency), respectively, on a year-over-year basis. Per our model, second-quarter net cruise costs (excluding fuel per APCD) are estimated at $126.2 million (on a reported basis) and $126.7 million (constant-currency basis).