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Royal Caribbean (RCL) to Post Q3 Earnings: What's in Store?

Royal Caribbean Group RCL is scheduled to report its third-quarter 2022 results on Nov 3, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 6.7%.

Q3 Estimates

The Zacks Consensus Estimate for the company's third-quarter bottom line is pegged at 23 cents per share. In the prior-year quarter, the company reported a loss per share of $4.91. The consensus mark for revenues stands at $3 billion, suggesting a whopping 557.6% surge from the year-ago reported figure.

Royal Caribbean Cruises Ltd. Price and EPS Surprise

Royal Caribbean Cruises Ltd. Price and EPS Surprise
Royal Caribbean Cruises Ltd. Price and EPS Surprise

Royal Caribbean Cruises Ltd. price-eps-surprise | Royal Caribbean Cruises Ltd. Quote

Factors to Note

Royal Caribbean’s third-quarter performance is likely to have benefited from strong demand for leisure travel and cruising, improved booking trends and solid onboard spending. An increase in ticket revenues, and onboard and other revenues are likely to have aided the top line.

The Zacks Consensus Estimate for third-quarter passenger ticket revenues, and onboard and other revenues is currently pegged at $2,042 million and $933 million, respectively, indicating $280 million and $177 million growth from the respective prior-year quarter’s reported figures. Increased penetration of pre-cruise purchases is likely to have driven RCL’s onboard revenue performance in the to-be-reported quarter.

However, China, which is closed to international travelers, is likely to have hurt its performance. On the other hand, supply-chain constraints, transitory costs related to health and safety protocols and elevated expenses (including fuel and food) are likely to negatively impact the results.

The company has also anticipated the hurdles that can weigh on its 2022 earnings. For the second half of 2022, net cruise costs, excluding fuel per APCD, are likely to be higher by mid-single digits compared with 2019. The third quarter is expected to be higher.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Royal Caribbean this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Earnings ESP: Royal Caribbean has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3.

Stocks With Favorable Combinations

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.

Crocs, Inc. CROX has an Earnings ESP of +1.48% and a Zacks Rank #1.

Shares of Crocs have declined 57.2% in the past year. CROX’s earnings surpassed the consensus mark in all the trailing four quarters, the average surprise being 21.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

RCI Hospitality Holdings, Inc. RICK has an Earnings ESP of +4.15% and a Zacks Rank #2.

Shares of RCI Hospitality have improved 21% in the past year. RICK’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 39.4%.

Cedar Fair, L.P. FUN has an Earnings ESP of +2.38% and a Zacks Rank #3.

Shares of Cedar Fair have declined 12.8% in the past year. FUN’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 5.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
 
Crocs, Inc. (CROX) : Free Stock Analysis Report
 
Cedar Fair, L.P. (FUN) : Free Stock Analysis Report
 
RCI Hospitality Holdings, Inc. (RICK) : Free Stock Analysis Report
 
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