Royal Caribbean (RCL) Q1 Earnings Top Estimates, Revenues Lag
Royal Caribbean Cruises Ltd. RCL reported mixed first-quarter 2022 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line rose year over year, while the bottom line declined on a year-over-year basis.
Following the results, the company’s shares dropped 2.6% in pre-market trading session. Negative investor sentiments were witnessed as the company cited inflationary and supply chain challenges (related to fuel and food costs) and transitory costs related to health and safety protocols. The company anticipates the hurdles to weigh on its 2022 earnings.
Q1 Earnings & Revenues
The company reported an adjusted loss per share of $4.57, narrower than the Zacks Consensus Estimate of a loss of $4.68. In the prior-year quarter, it had reported an adjusted loss per share of $4.44 per share.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
Royal Caribbean Cruises Ltd. price-consensus-eps-surprise-chart | Royal Caribbean Cruises Ltd. Quote
Quarterly revenues of $1,059.2 million lagged the consensus mark of $1,110 million. In the prior-year quarter, the company had reported revenues of $42 million. The upside was primarily driven by strong demand for cruising and acceleration in booking volumes.
Quarterly Highlights
During first-quarter 2022, passenger ticket revenues amounted to $651.9 million, up from the prior-year quarter’s revenues of $20.8 million. Onboard and other revenues increased to $407.4 million from $21.2 million reported in the year-ago quarter.
Total cruise operating expenses during the quarter came in at $1,184.8 million compared with $283.5 million reported in the prior-year quarter.
Other Financial Information
As of Mar 31, 2022, the company had cash and cash equivalents of approximately $1,968.5 million compared with $2,701.8 million as of Dec 31, 2021. As of Mar 31, its long-term debt was nearly $19.9 billion compared with $18.8 billion as of Dec 31, 2021.
In second-quarter 2022, the company anticipates net interest expenses in the range of $300-310 million.
Booking Update
During the quarter, the company reported solid booking trends for Europe and North America-based itineraries. It stated that bookings for the regions (particularly in February and March) exceeded 2019 levels. The company stated that pricing (including and excluding FCCs) for the second half and full-year 2022 remains elevated from 2019 levels.
However, load factors for sailings in the second half of 2022 are below historical ranges. The company anticipates the situation in Ukraine to dent load factors in Europe during the summer season.
As of Mar 31, 2022, the company had nearly $3.6 billion in customer deposits. During the quarter, the FCC’s share in deposits came in at 27% compared with 32% reported in the previous quarter. This indicates a positive trajectory in demand.
Zacks Rank & Key Picks
Royal Caribbean currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Clarus Corporation CLAR, Bluegreen Vacations Holding Corporation BVH and Funko, Inc. FNKO.
Clarus sports a Zacks Rank #1 (Strong Buy) at present. The company has a trailing four-quarter earnings surprise of 12.3%, on average. Shares of the company have increased 21.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CLAR’s 2022 sales and earnings per share (EPS) suggests growth of 25.3% and 22.5%, respectively, from the year-ago period’s levels.
Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 425.1%, on average. The stock has increased 44.1% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s reported levels.
Funko sports a Zacks Rank #1. FNKO has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have declined 16.9% in the past year.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 22.6% and 26.8%, respectively, from the year-ago period’s reported levels.
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