Wed. Feb 28th, 2024

RCL stock reversed early gains Thursday after cruise line giant Royal Caribbean Group (RCL) warned that the Israel-Hamas war had led to some cruise cancellations. But the company’s Q3 results topped expectations and management hoisted its full-year outlook.


Royal Caribbean reported adjusted earnings leapt to $3.85 per share from 26 cents per share last year. Revenue spiked 39% to $4.16 billion.

Analysts polled by FactSet expected earnings of $3.46 per share on $4.08 billion in sales.

Royal Caribbean’s occupancy rate improved to 109.7% for the quarter from 96.3% for the same period in 2022.

“Looking ahead, we see accelerating demand as we build the business in 2024,” CEO Jason Liberty said in the news release. He noted Royal Caribbean’s booked load factors are higher than all prior years and at higher rates.

The company guided full-year earnings between $6.58 and $6.63 per share, up from the prior guidance of $6 to $6.20 per share. The updated outlook includes an 18 cents per share impact from fuel pricing and foreign exchange rates. Meanwhile, Royal Caribbean is working with the State Department to evacuate Americans from Israel, which it says will cause a 3 cent per share impact on earnings.

Royal Caribbean did not provide a revenue outlook but noted demand continues to accelerate and 2024 bookings are “significantly and consistently” outpacing 2019 levels.

FactSet expects full-year earnings of $6.12 per share, improving from a loss of $7.50 per share last year. Analysts forecast revenue sails 56.3% to $13.82 billion.

The company guided Q4 earnings between $1.05 and $1.10 per share, including a 15 cents per share impact from fuel pricing and 3-cent-per-share impact from the Israel deployment.

Analysts project earnings of $1 per share for Q4 compared to a loss of $1.12 per share last year. Wall Street forecasts 28% revenue growth to $3.33 billion.

The results marked Royal Caribbean’s second major quarterly earnings beat in a row.

RCL Stock

RCL stock retreated about 3% after Thursday’s open. Shares initially surged nearly 3% following results.

The move pushed RCL stock below its 200-day moving average.

Cruise rival Carnival (CCL) slumped 2.6% Thursday morning. Carnival posted its first quarterly profit since the pandemic in its late September results.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison


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