Markets
RCL

What's in Store for Royal Caribbean (RCL) in Q4 Earnings?

Global cruise vacation company Royal Caribbean Cruises Ltd.RCL is scheduled to report fourth-quarter 2016 numbers on Jan 26, before the opening bell.

Last quarter, Royal Caribbean posted a 3.23% positive earnings surprise. In fact, the company's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 22.60%.

Let's see how things are shaping up for this announcement.

Royal Caribbean Cruises Ltd. Price and EPS Surprise

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

Factors Likely to Influence this Quarter

Royal Caribbean generates a major portion of its revenues from customers outside the U.S. where the majority pay with local currency. Hence, any unfavorable change in currency is likely to hurt its bottom-line performance in the to-be-reported quarter. Notably, Royal Caribbean expects adjusted fourth-quarter earnings per share to be $1.20.

Meanwhile, lingering global uncertainty in economies like Europe and China might limit revenue growth. Also, higher marketing and promotional expenditure along with increased cruise costs may hurt the quarter's margins.

Nonetheless, strong booking trends, capacity growth, technological innovation along with various profit-generating initiatives are expected to somewhat bolster the quarter's results. Particularly, the company's North American products and Asia-Pacific itineraries are likely to continue performing strongly similar to the case over the past few quarters.

Earnings Whispers

Our proven model does not conclusively show that Royal Caribbean is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks ESP : Royal Caribbean has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.21.

Zacks Rank : Royal Caribbean has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

MGM Resorts International MGM has an Earnings ESP of +50.00% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Peak Resorts, Inc. SKIS has an Earnings ESP of +10.71% and a Zacks Rank #3.

Time Warner Inc. TWX has an Earnings ESP of +2.52% and a Zacks Rank #3.

Zacks' Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?

Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MGM Resorts International (MGM): Free Stock Analysis Report

Time Warner Inc. (TWX): Free Stock Analysis Report

Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report

Peak Resorts, Inc. (SKIS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

RCL MGM

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More