Cruise lines rallied briskly Thursday after Royal Caribbean trounced estimates for Q2 earnings and sharply hoisted its full-year outlook. RCL stock soared to its highest mark since early 2020.
Cruise lines have posted powerful gains through 2023 as consumers cut loose to spend on vacations delayed by pandemic lockdowns. Royal Caribbean reported adjusted earnings leapt to $1.82 per share compared to a loss of $2.08 per share last year. Revenue spiked 61% to $3.52 billion.
Analysts polled by FactSet expected earnings of $1.57 per share on $3.4 billion in revenue.
Royal Caribbean noted that Q2 booking volumes were at record pricing levels, and "significantly higher" than the corresponding period in 2019 — before the crash on demand as the pandemic began. Demand for 2023 sailings is well above expectations, while 2024 bookings are up significantly compared to prior years, at record prices, the cruise line reported.
"Demand for cruising and our brands is exceptionally strong and we have seen another step change in booking volumes and pricing, leading us to now expect double-digit net yield growth for the full year," CEO Jason Liberty said in the earnings release.
For the third quarter, Royal Caribbean guided adjusted earnings to range from $3.38 to $3.48 per share, a massive improvement from the 26 cents EPS reported last year. However, earnings won't recover to the $4.27 per share reported in 2019. Net yields are seen increasing 13.5% to 14% compared to Q3 2019.
FactSet expects Q3 earnings of $2.87 per share on $3.81 billion in revenue.
The company raised its adjusted full-year earnings guidance by 33% to range from $6 to $6.20 per share. Royal Caribbean sees net yields increasing 11.5% to 12% compared to 2019 levels before the pandemic.
Analysts polled by FactSet guided Royal Caribbean earnings rising to $4.75 per share compared to a $7.50 loss in 2022. Revenue is seen vaulting 49% to $13.21 billion.
RCL Stock
RCL stock popped 8.7% to 109.67 Thursday - its highest level since February 2020. Shares leapt more than 10% premarket Thursday following earnings.
RCL stock sailed 121.9% higher so far this year.
Among other cruise lines, Carnival rallied 3.2%. Norwegian Cruise Line Holdings surged 2.7%. Norwegian is scheduled to report second-quarter results August 1. Carnival reported at the end of June.
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