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Royal Caribbean (RCL) Q2 Earnings and Revenues Top Estimates

Royal Caribbean Cruises Ltd.RCL reported better-than-expected second-quarter 2018 results. Adjusted earnings of $2.27 per share surpassed the Zacks Consensus Estimate of $1.97 by 15.2% and increased 32.7% year over year backed by higher revenues. The bottom-line figure was also higher than the company's guided range of $1.85-$1.90.

Total revenues of $2,337.6 million outpaced the consensus mark of $2,331 million and increased 6.5% from the year-ago quarter number. This upside can be attributed to higher passenger ticket as well as onboard and other revenues.

Quarterly Highlights

Passenger ticket revenues jumped 5.8% to $1,672.6 million, and onboard and other revenues increased 8.3% to $665 million.

On a constant-currency basis, net yields rose 2.8% year over year. This improvement was backed by strong demand for core products and better-than-expected onboard spend.

Net cruise costs (NCC), excluding fuel, grew 1.1% on a constant-currency basis, lower than management's expectation of a 5% increase. Notably, rise in costs was mainly owing to marketing expenses and timing of hotel as well as marine associated projects.

Total cruise operating expenses came in at $1,314 million, up 4.6% on a year-over-year basis. The company witnessed rise in operating expenses at Payroll and related, Onboard and other, Commissions, transportation and other, and other operating. Also, fuel and food expenses were up during the quarter.

3Q18 Guidance

For the third quarter of 2018, Royal Caribbean expects adjusted earnings per share in the range of $3.90-$3.95. The Zacks Consensus Estimate for the quarter is currently pegged at $4.01.

Constant-currency net yields are projected to increase by nearly 2%. NCC, excluding fuel, is likely to be down nearly 1% at constant currency.

Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise

Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise | Royal Caribbean Cruises Ltd. Quote

2018 Outlook

For 2018, Royal Caribbean continues anticipating earnings in the band of $8.70-$8.90 per share. The Zacks Consensus Estimate for the year stands at $8.84. The company expects net yields to lie between 2.75% and 3.75% on a constant-currency basis.

NCC, excluding fuel, is expected to be up 2.5% on a constant-currency basis.

Royal Caribbean Cruises, which shares space with Carnival Corporation CCL and AMC Entertainment Holdings, Inc. AMC , has a Zacks Rank #3 (Hold).

A Key Pick

A better-ranked stock worth considering in the same space is Vail Resorts, Inc. MTN , which sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Vail Resorts has reported better-than-expected earnings in the trailing two quarters.

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Carnival Corporation (CCL): Free Stock Analysis Report

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AMC Entertainment Holdings, Inc. (AMC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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