Royal Caribbean Group has boosted its earnings guidance by one-third as a result of fiscal performance that went above and beyond its own forecasts.
The New York-listed cruise giant based this decision on achieving adjusted earnings per share of $1.82 for the second quarter, which beat analyst consensus of $1.55 and blew away a year-ago adjusted loss per share of $2.08.
“These results were significantly better than the company’s guidance due to stronger pricing on closer-in demand and further strength in on board revenue,” the New York-listed company said.
“As a result of the accelerating demand environment for its vacation experiences, the company is increasing its 2023 adjusted earnings per share guidance by 33% from $6.00 to $6.20.”
The higher-than-expected adjusted EPS was based on $492m in adjusted profit for the second quarter, a turnaround from an adjusted loss of $540m in the same quarter in 2022.
The Miami-based cruise ship operator posted a net profit of $459m for the second quarter, improving on a $552m net loss for the same period last year.
“Our brands continue to fire on all cylinders, resulting in record yields and second-quarter earnings significantly exceeding our expectations,” chief executive Jason Liberty said in a statement.
“Demand for cruising and our brands is exceptionally strong and we have seen another step change in booking volumes and pricing, leading us to now expect double-digit net yield growth for the full year.”
The results apparently pleased Wall Street investors as Royal Caribbean’s shares gained 10.7% to reach $111.53 in early afternoon trading in New York.
Royal Caribbean recorded $3.52bn in revenue for the second quarter, up from $2.18bn in revenue for the same period in 2022.
“Second quarter revenue significantly exceeded the company’s guidance due to higher pricing and higher shipboard revenue across the company’s key itineraries, including the Caribbean and Europe,” the Miami-based company said.
“Load factor for the second quarter was 105%.”
Royal Caribbean did not disclose bookings revenue for the second quarter but said that booking volumes remained significantly higher than the same period in 2019 and at record pricing levels.
“Demand for 2023 sailings has significantly exceeded expectations and bookings for 2024 sailings are up significantly versus all prior years at record prices,” Royal Caribbean said.
“Demand from the North American consumer has remained incredibly strong throughout the year, and booking volumes from European consumers who are booking European cruises this summer have accelerated.”
As of 30 June, Royal Caribbean’s customer deposit balance reached a record-high $5.7bn.
The company has $3.7bn in liquidity and has lowered its long-term debt to $18.7bn from $21.3bn a year ago.
For the first half of 2023, Royal Caribbean posted $411m in profit, an improvement on a $1.69bn loss during the first six months of 2022.
