Royal Caribbean Tops Q2 Earnings Expectations, Raises Full-Year Guidance, But Shares Fall

Royal Caribbean (NYSE:RCL) announced its second-quarter results on Thursday, exceeding analyst expectations with an adjusted EPS of $3.21, higher than the Street estimate of $2.75.

The cruise line operator reported revenue of $4.1 billion, surpassing the consensus estimate of $4.04 billion. Despite the earnings beat, Royal Caribbean shares fell by 2% in pre-market today.

The company credited its strong performance to robust pricing on close-in demand and onboard revenue, as well as favorable expense timing. Year-over-year, Royal Caribbean's net income surged to $854 million, or $3.11 per share, from $459 million, or $1.70 per share, in the second quarter of the previous year.

Adjusted net income also increased to $882 million, or $3.21 per share, from $492 million, or $1.82 per share, year-over-year. President and CEO Jason Liberty emphasized the exceptional demand for Royal Caribbean's vacation experiences as a significant factor in the company's accelerated performance and substantial yield growth over the past several years.

Looking ahead, Royal Caribbean raised its full-year 2024 adjusted EPS guidance to a range of $11.35 to $11.45, reflecting a 68% year-over-year growth and surpassing the Street estimate of $11.08.

This optimistic outlook is supported by the company's record bookings and strong consumer spending onboard and through pre-cruise purchases.

For the third quarter of 2024, Royal Caribbean anticipates an adjusted EPS between $4.90 and $5.00. Net yields are expected to increase by 6.5% to 7.0%, and net cruise costs, excluding fuel per available passenger cruise days, are projected to rise by 4.7% to 5.2%.