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Royal Caribbean (RCL) Tops Q3 Earnings Estimates, Raises '23 View
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Royal Caribbean Cruises Ltd. (RCL - Free Report) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by solid cruising demand, improvement in load factors and onboard spending momentum. Following the results, the stock moved up 1% in the pre-market trading session.
Q3 Earnings & Revenues
During the third quarter of 2023, the company reported an adjusted earnings per share (EPS) of $3.85, beating the Zacks Consensus Estimate of $3.43. In the prior-year quarter, RCL had incurred an adjusted EPS of 26 cents.
Quarterly revenues of $4.2 billion outpaced the consensus mark of $4 billion. In the prior-year quarter, RCL reported revenues of $2.9 billion. A rise in close-in demand (at higher prices) and continued strength in onboard revenues added to the positives.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
In the third quarter of 2023, passenger ticket revenues amounted to $2.9 million, up from $2 billion in the prior-year quarter. Our estimate for passenger ticket revenues was $2.9 billion.
Onboard and other revenues increased to $1.2 billion, up from $972.1 million reported in the year-ago quarter. Our estimate for Onboard and other revenues was $991.8 million.
Total cruise operating expenses amounted to $2.1 billion, up 8.7% year over year. Our estimate for the metric was $1.9 billion.
Net yields rose 16.7% on a constant-currency basis compared with the third-quarter 2019 levels. Net cruise costs, excluding fuel per APCD, rose 10.1% on a reported basis and 10.3% on a constant-currency basis compared with third-quarter 2019 figures.
Other Financial Information
As of Sep 30, 2023, RCL reported cash and cash equivalents of $600.1 million compared with $726.4 million as of Jun 30, 2023. As of Sep 30, long-term debt was $17.9 billion compared with $18.7 billion as of Jun 30, 2023.
Booking Update
Booking volumes in the third quarter were much higher than in the same period in 2019. The company reported solid bookings concerning North America and European sailings. It stated a rise in consumer spending onboard and pre-cruise purchases. It revealed that the metrics surpassed 2019 levels, courtesy of greater participation at higher prices. In third-quarter 2023, load factors were 110%.
The company reported that the momentum has continued into 2024, with booked load factors and rates surpassing those of all previous years. As of Sep 30, RCL had $5 billion in customer deposits compared with $4.2 billion as of Dec 31, 2022.
Q4 & 2023 Outlook
In the fourth quarter of 2023, Royal Caribbean expects depreciation and amortization expenses of $365-$375 million. Net interest expenses (excluding loss on extinguishment of debt) are estimated between $305-$315 million. Management estimates fourth-quarter adjusted EPS in the range of $1.05-$1.10.
For 2023, RCL expects depreciation and amortization expenses between $1,450 million and $1,460 million. Net interest expenses (excluding loss on extinguishment of debt) are projected at $1,245-1,255 million, down from the earlier guidance of $1,272-1,282 million. Adjusted EPS is anticipated to be $6.58-$6.63, up from the prior projection of $6-$6.20.
Net yields in 2023 are anticipated to increase 12.4-12.9% (on a reported basis) and12.9-13.4% (on a constant-currency basis) compared with 2019 levels. Earlier, the company had projected net yields to grow 11.5-12% (on a reported basis and at cc).
Zacks Rank & Key Picks
Royal Caribbean currently carries a Zacks Rank #3 (Hold).
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have declined 0.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 21.6% and 59.4%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Caesars Entertainment, Inc. (CZR - Free Report) carries a Zacks Rank #2 (Buy). CZR has a trailing four-quarter earnings surprise of 74.3% on average. Shares of the company have dropped 9.4% in the past year.
The Zacks Consensus Estimate for CZR’s 2023 sales and EPS indicates a rise of 7% and 214.4%, respectively, from the year-ago period’s levels.
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Royal Caribbean (RCL) Tops Q3 Earnings Estimates, Raises '23 View
Royal Caribbean Cruises Ltd. (RCL - Free Report) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by solid cruising demand, improvement in load factors and onboard spending momentum. Following the results, the stock moved up 1% in the pre-market trading session.
Q3 Earnings & Revenues
During the third quarter of 2023, the company reported an adjusted earnings per share (EPS) of $3.85, beating the Zacks Consensus Estimate of $3.43. In the prior-year quarter, RCL had incurred an adjusted EPS of 26 cents.
Quarterly revenues of $4.2 billion outpaced the consensus mark of $4 billion. In the prior-year quarter, RCL reported revenues of $2.9 billion. A rise in close-in demand (at higher prices) and continued strength in onboard revenues added to the positives.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
Royal Caribbean Cruises Ltd. price-consensus-eps-surprise-chart | Royal Caribbean Cruises Ltd. Quote
Quarterly Highlights
In the third quarter of 2023, passenger ticket revenues amounted to $2.9 million, up from $2 billion in the prior-year quarter. Our estimate for passenger ticket revenues was $2.9 billion.
Onboard and other revenues increased to $1.2 billion, up from $972.1 million reported in the year-ago quarter. Our estimate for Onboard and other revenues was $991.8 million.
Total cruise operating expenses amounted to $2.1 billion, up 8.7% year over year. Our estimate for the metric was $1.9 billion.
Net yields rose 16.7% on a constant-currency basis compared with the third-quarter 2019 levels. Net cruise costs, excluding fuel per APCD, rose 10.1% on a reported basis and 10.3% on a constant-currency basis compared with third-quarter 2019 figures.
Other Financial Information
As of Sep 30, 2023, RCL reported cash and cash equivalents of $600.1 million compared with $726.4 million as of Jun 30, 2023. As of Sep 30, long-term debt was $17.9 billion compared with $18.7 billion as of Jun 30, 2023.
Booking Update
Booking volumes in the third quarter were much higher than in the same period in 2019. The company reported solid bookings concerning North America and European sailings. It stated a rise in consumer spending onboard and pre-cruise purchases. It revealed that the metrics surpassed 2019 levels, courtesy of greater participation at higher prices. In third-quarter 2023, load factors were 110%.
The company reported that the momentum has continued into 2024, with booked load factors and rates surpassing those of all previous years. As of Sep 30, RCL had $5 billion in customer deposits compared with $4.2 billion as of Dec 31, 2022.
Q4 & 2023 Outlook
In the fourth quarter of 2023, Royal Caribbean expects depreciation and amortization expenses of $365-$375 million. Net interest expenses (excluding loss on extinguishment of debt) are estimated between $305-$315 million. Management estimates fourth-quarter adjusted EPS in the range of $1.05-$1.10.
For 2023, RCL expects depreciation and amortization expenses between $1,450 million and $1,460 million. Net interest expenses (excluding loss on extinguishment of debt) are projected at $1,245-1,255 million, down from the earlier guidance of $1,272-1,282 million. Adjusted EPS is anticipated to be $6.58-$6.63, up from the prior projection of $6-$6.20.
Net yields in 2023 are anticipated to increase 12.4-12.9% (on a reported basis) and12.9-13.4% (on a constant-currency basis) compared with 2019 levels. Earlier, the company had projected net yields to grow 11.5-12% (on a reported basis and at cc).
Zacks Rank & Key Picks
Royal Caribbean currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have declined 0.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 21.6% and 59.4%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Caesars Entertainment, Inc. (CZR - Free Report) carries a Zacks Rank #2 (Buy). CZR has a trailing four-quarter earnings surprise of 74.3% on average. Shares of the company have dropped 9.4% in the past year.
The Zacks Consensus Estimate for CZR’s 2023 sales and EPS indicates a rise of 7% and 214.4%, respectively, from the year-ago period’s levels.