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Royal Caribbean (RCL) Q3 Earnings to Gain From Solid Booking
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Royal Caribbean Cruises Ltd. (RCL - Free Report) is scheduled to report third-quarter 2018 financial numbers on Oct 25, before the opening bell.
We believe that increased leisure demand and solid booking trends, coupled with the company’s cost-cutting initiatives, are likely to have bolstered both top and bottom-line growth in the third quarter of 2018.
Let’s delve deeper into factors that may have shaped up Royal Caribbean’s third quarter.
Top Line to Gain on Increased Demand
In the second quarter of 2018, Royal Caribbean witnessed revenue growth of 6.5% year over year. The upside was primarily driven by a 5.8% and 8.3% year-over-year increase in passenger ticket revenues, and onboard and other revenues, respectively.
Given that Royal Caribbean is steadfast in increasing its capacity to match the rising demand, we believe that the positive trend has continued in the to-be-reported quarter as well. Moreover, increased demand has led the company to remain in a solid booking position for the current year.
Subsequently, the Zacks Consensus Estimate for revenues in the third quarter is pegged at $2.8 billion, reflecting 9.8% growth from the year-ago quarter. Further, the consensus estimate predicts passenger ticket revenues to increase 23.3% sequentially, while onboard and other revenues are predicted to grow 12.9% from the last reported quarter.
Profitability Initiatives to Boost Bottom Line
Royal Caribbean has been undertaking profitability improvement initiatives, which are aimed at generating long-term cost savings since 2014. Under its Double-Double program, the company aimed to bring return on invested capital (ROIC) to double-digit percentages, and improve revenue yields, control costs and moderate capacity growth. It anticipates 2018 EPS of $8.70-$8.90, reflecting another year of double-digit growth after 2017.
For the third quarter, the company expects adjusted earnings per share of $3.90-$3.95. The Zacks Consensus Estimate for the quarter under review is currently pegged at $3.96, suggesting 13.5% growth from the year-ago quarter.
Our Model Suggests a Beat
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if those have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Royal Caribbean has an Earnings ESP of +0.19% and a Zacks Rank #3, a combination that suggests that the company is likely to beat estimates.
Royal Caribbean Cruises Ltd. Price and EPS Surprise
Penn National (PENN - Free Report) has an Earnings ESP of +1.29% and a Zacks Rank #3. The company is scheduled to report quarterly numbers on Nov 1.
SeaWorld Entertainment is scheduled to report quarterly results on Nov 5. The company presently flaunts a Zacks Rank #1 and has an Earnings ESP of +4.05%.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Royal Caribbean (RCL) Q3 Earnings to Gain From Solid Booking
Royal Caribbean Cruises Ltd. (RCL - Free Report) is scheduled to report third-quarter 2018 financial numbers on Oct 25, before the opening bell.
We believe that increased leisure demand and solid booking trends, coupled with the company’s cost-cutting initiatives, are likely to have bolstered both top and bottom-line growth in the third quarter of 2018.
Let’s delve deeper into factors that may have shaped up Royal Caribbean’s third quarter.
Top Line to Gain on Increased Demand
In the second quarter of 2018, Royal Caribbean witnessed revenue growth of 6.5% year over year. The upside was primarily driven by a 5.8% and 8.3% year-over-year increase in passenger ticket revenues, and onboard and other revenues, respectively.
Given that Royal Caribbean is steadfast in increasing its capacity to match the rising demand, we believe that the positive trend has continued in the to-be-reported quarter as well. Moreover, increased demand has led the company to remain in a solid booking position for the current year.
Subsequently, the Zacks Consensus Estimate for revenues in the third quarter is pegged at $2.8 billion, reflecting 9.8% growth from the year-ago quarter. Further, the consensus estimate predicts passenger ticket revenues to increase 23.3% sequentially, while onboard and other revenues are predicted to grow 12.9% from the last reported quarter.
Profitability Initiatives to Boost Bottom Line
Royal Caribbean has been undertaking profitability improvement initiatives, which are aimed at generating long-term cost savings since 2014. Under its Double-Double program, the company aimed to bring return on invested capital (ROIC) to double-digit percentages, and improve revenue yields, control costs and moderate capacity growth. It anticipates 2018 EPS of $8.70-$8.90, reflecting another year of double-digit growth after 2017.
For the third quarter, the company expects adjusted earnings per share of $3.90-$3.95. The Zacks Consensus Estimate for the quarter under review is currently pegged at $3.96, suggesting 13.5% growth from the year-ago quarter.
Our Model Suggests a Beat
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if those have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Royal Caribbean has an Earnings ESP of +0.19% and a Zacks Rank #3, a combination that suggests that the company is likely to beat estimates.
Royal Caribbean Cruises Ltd. Price and EPS Surprise
Royal Caribbean Cruises Ltd. Price and EPS Surprise | Royal Caribbean Cruises Ltd. Quote
Other Stocks to Consider
Here are some other companies from the Consumer Discretionary sector that are poised to record an earnings beat this quarter.
Acushnet Holdings (GOLF - Free Report) has an Earnings ESP of +28.57% and a Zacks Rank #3. The company is slated to report quarterly results on Nov 1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Penn National (PENN - Free Report) has an Earnings ESP of +1.29% and a Zacks Rank #3. The company is scheduled to report quarterly numbers on Nov 1.
SeaWorld Entertainment is scheduled to report quarterly results on Nov 5. The company presently flaunts a Zacks Rank #1 and has an Earnings ESP of +4.05%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>