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Factors Setting the Tone for Royal Caribbean (RCL) Q4 Earnings
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Royal Caribbean Group (RCL - Free Report) is scheduled to release fourth-quarter 2023 results on Feb 1, 2024. In the previous quarter, RCL delivered an earnings surprise of 12.2%.
Trend in Estimate Revision
The Zacks Consensus Estimate for Royal Caribbean’s fourth-quarter earnings per share (EPS) is pegged at $1.13. In the prior-year quarter, RCL reported a loss per share of $1.12.
For revenues, the consensus mark is pegged at $3.4 billion. The projection suggests an increase of 29.6% from the year-ago quarter’s reported figure.
Royal Caribbean Cruises Ltd. Price and EPS Surprise
Let’s take a look at how things have shaped up for the quarter to be reported.
Factors at Play
Royal Caribbean’s fourth-quarter top line is expected to have increased year over year on the back of an accelerating demand environment, a strong pricing environment and continued strength from onboard revenue areas. Robust demand, courtesy of its digital initiatives, enhanced commercial capabilities and ship upgrades, are likely to have aided the company’s performance in the to-be-reported quarter.
Our model estimates fourth-quarter passenger ticket revenues to rise 37.1% year over year to $2.3 billion. We expect onboard and other revenues to rise 12.7% year over year to $1 billion.
Strong book position, increased rates in ticket and chip board (for like-for-like chips) and new hardware additions are likely to have paved a path for yield improvements in the fourth quarter. The company anticipates net yields to rise 15-15.5% (on a reported basis) and 16.2-16.7% (constant-currency basis) from 2019 levels. Our model predicts fourth-quarter net yields at $226.7 million (on a reported basis) and $230.3 million (constant-currency basis).
Elevated costs concerning fuel and food are likely to have hurt margins in the fourth quarter. In fourth-quarter 2023, the company expects net cruise costs (excluding fuel per APCD) to increase 3.3-3.8% (on a reported basis) and 3.9-4.4% (constant currency) year over year. Per our model, fourth-quarter net cruise costs (excluding fuel per APCD) are estimated at $121.4 million (on a reported basis) and $122.2 million (on a constant-currency basis).
The company’s fourth-quarter bottom line is likely to reflect $0.18 negative impact on account of FX, fuel rates and cancellations of Israel sailings. Management estimates fourth-quarter adjusted EPS in the range of $1.05-$1.10.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Royal Caribbean this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings. But that's not the case here.
Earnings ESP: Royal Caribbean has an Earnings ESP of -0.65%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat:
MGM Resorts International (MGM - Free Report) has an Earnings ESP of +14.99% and a Zacks Rank #3.
Shares of MGM Resorts have increased 9.5% in the past year. MGM’s earnings beat estimates in each of the trailing four quarters, the average surprise being 292.7%.
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +1.10% and a Zacks Rank #3.
Shares of Boyd Gaming have gained 6.8% in the past year. BYD’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 6.9%.
Hasbro, Inc. (HAS - Free Report) has an Earnings ESP of +5.05% and a Zacks Rank #3.
Hasbro’s shares have declined 13.2% in the past year. HAS’ earnings beat estimates in two of the trailing four quarters and missed twice, the negative surprise being 22.4%, on average.
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Factors Setting the Tone for Royal Caribbean (RCL) Q4 Earnings
Royal Caribbean Group (RCL - Free Report) is scheduled to release fourth-quarter 2023 results on Feb 1, 2024. In the previous quarter, RCL delivered an earnings surprise of 12.2%.
Trend in Estimate Revision
The Zacks Consensus Estimate for Royal Caribbean’s fourth-quarter earnings per share (EPS) is pegged at $1.13. In the prior-year quarter, RCL reported a loss per share of $1.12.
For revenues, the consensus mark is pegged at $3.4 billion. The projection suggests an increase of 29.6% from the year-ago quarter’s reported figure.
Royal Caribbean Cruises Ltd. Price and EPS Surprise
Royal Caribbean Cruises Ltd. price-eps-surprise | Royal Caribbean Cruises Ltd. Quote
Let’s take a look at how things have shaped up for the quarter to be reported.
Factors at Play
Royal Caribbean’s fourth-quarter top line is expected to have increased year over year on the back of an accelerating demand environment, a strong pricing environment and continued strength from onboard revenue areas. Robust demand, courtesy of its digital initiatives, enhanced commercial capabilities and ship upgrades, are likely to have aided the company’s performance in the to-be-reported quarter.
Our model estimates fourth-quarter passenger ticket revenues to rise 37.1% year over year to $2.3 billion. We expect onboard and other revenues to rise 12.7% year over year to $1 billion.
Strong book position, increased rates in ticket and chip board (for like-for-like chips) and new hardware additions are likely to have paved a path for yield improvements in the fourth quarter. The company anticipates net yields to rise 15-15.5% (on a reported basis) and 16.2-16.7% (constant-currency basis) from 2019 levels. Our model predicts fourth-quarter net yields at $226.7 million (on a reported basis) and $230.3 million (constant-currency basis).
Elevated costs concerning fuel and food are likely to have hurt margins in the fourth quarter. In fourth-quarter 2023, the company expects net cruise costs (excluding fuel per APCD) to increase 3.3-3.8% (on a reported basis) and 3.9-4.4% (constant currency) year over year. Per our model, fourth-quarter net cruise costs (excluding fuel per APCD) are estimated at $121.4 million (on a reported basis) and $122.2 million (on a constant-currency basis).
The company’s fourth-quarter bottom line is likely to reflect $0.18 negative impact on account of FX, fuel rates and cancellations of Israel sailings. Management estimates fourth-quarter adjusted EPS in the range of $1.05-$1.10.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Royal Caribbean this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat on earnings. But that's not the case here.
Earnings ESP: Royal Caribbean has an Earnings ESP of -0.65%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Royal Caribbean has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat on Earnings
Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat:
MGM Resorts International (MGM - Free Report) has an Earnings ESP of +14.99% and a Zacks Rank #3.
Shares of MGM Resorts have increased 9.5% in the past year. MGM’s earnings beat estimates in each of the trailing four quarters, the average surprise being 292.7%.
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +1.10% and a Zacks Rank #3.
Shares of Boyd Gaming have gained 6.8% in the past year. BYD’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 6.9%.
Hasbro, Inc. (HAS - Free Report) has an Earnings ESP of +5.05% and a Zacks Rank #3.
Hasbro’s shares have declined 13.2% in the past year. HAS’ earnings beat estimates in two of the trailing four quarters and missed twice, the negative surprise being 22.4%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.