Global cruise holding company, Royal Caribbean Group (NYSE: RCL) surged in morning trading on Thursday after the company swung to a profit in Q2 with adjusted earnings of $1.82 per share versus a loss of $2.08 per share in the same period last year and above consensus estimates of $1.57 per share.
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The company’s revenues surged by 61.3% year-over-year to $3.5 billion, beating Street estimates of $3.41 billion. The rise in revenues was led by strong ticket pricing in both North America and Europe and strength in onboard revenues.
Jason Liberty, president and CEO, Royal Caribbean Group commented, “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. We also expect to achieve record Adjusted EBITDA per APCD and Return on Invested Capital this year and are well on our way toward achieving our Trifecta goals.”
Looking forward, RCL expects its Q3 net yields to increase by 13.5% to 14% on a constant currency basis compared to the third quarter of 2019. Adjusted earnings are likely to be in the range of $3.38 to $3.48 per share in Q3. In FY23, net yields are forecasted to increase by 11.5% to 12% on a constant currency basis as compared to 2019 while adjusted earnings are projected to be between $6.00 and $6.20 per share.
Analysts are cautiously optimistic about RCL stock with a Moderate Buy consensus rating based on 10 Buys and four Holds.
