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Royal Caribbean (RCL) Stock Down on Q4 Earnings & Revenue Miss

·4 min read

Royal Caribbean Cruises Ltd. RCL reported fourth-quarter 2021 results, wherein earnings and revenues missed the Zacks Consensus Estimate. Both the metrics lagged the consensus mark for the third consecutive quarter. Following the results, the company’s shares are down 2.7% in pre-market trading session.

Across the company’s five brands, nearly 1.3 million guests sailed in 2021. By the end of 2021, 50 out of 61 ships have returned to operations, representing more than 85% of its worldwide capacity. The company’s bookings improved sequentially in the fourth quarter.

Jason Liberty, president and chief executive officer of the Royal Caribbean Group, said “Omicron created short-term operational challenges that have unfortunately weighed on close-in bookings. While the timing of Omicron was particularly unfortunate for the first half of 2022 bookings and will likely delay our return to profitability by a few months, we do not expect it to impact our overall recovery trajectory and the strong demand for cruising.”

Although the company witnessed service disruptions and canceled several sailings in first-quarter 2022, it anticipates operating roughly 95% of its planned capacity in the quarter.

Q4 Earnings & Revenues

The company reported an adjusted loss per share of $4.78, wider than the Zacks Consensus Estimate of a loss of $3.70. In the prior-year quarter, it had reported an adjusted loss per share of $5.02 per share.

Quarterly revenues of $982.3 million lagged the consensus mark of $1,138 million. In the prior-year quarter, the company had reported revenues of $34.1 million.

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

Quarterly Highlights

During fourth-quarter 2021, passenger ticket revenues amounted to $617.4 million, up from the prior-year quarter revenues of $17.5 million. Meanwhile, onboard and other revenues increased to $364.9 million from $16.6 million reported in the year-ago quarter.

Total cruise operating expenses were $1,135.5 million compared with $265.3 million at the end of fourth-quarter 2020.

Other Financial Information

As of Dec 31, 2021, the company had cash and cash equivalents of approximately $2,701.8 million compared with $3,684.5 million as of Dec 31, 2020. As of Dec 31, its long-term debt was nearly $18.8 billion compared with $18 billion as of Dec 31, 2020. For 2022, it has debt maturities of $2.3 billion.
In first-quarter 2022, the company anticipates net interest expense in the range of $270-275 million.

Booking Update

The spread of the Omicron variant in early January impacted the company’s cancellations as well as bookings for near-term sailings. In the first half of 2022, the company expects load factors for sailings to remain below historical levels. However, load factors for sailings in the second half of 2022 remain within historical ranges. As of Dec 31, 2021, the company had nearly $3.2 billion in customer deposits.

The company currently has a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks from the Zacks Consumer Discretionary sector are Crocs, Inc. CROX, RCI Hospitality Holdings, Inc. RICK and JAKKS Pacific, Inc. JAKK.

Crocs flaunts a Zacks Rank #1. Crocs has a trailing four-quarter earnings surprise of 41.6%, on average. CROX has rallied 31.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.7% and 23.2%, respectively, from the year-ago period’s levels.

RCI Hospitality flaunts a Zacks Rank #1. RCI Hospitality has a trailing four-quarter earnings surprise of 67.7%, on average. Shares of RCI Hospitality have surged 40.3% in the past year.

The Zacks Consensus Estimate for RICK’s 2022 sales and EPS suggests growth of 33.7% and 18.9%, respectively, from the year-ago period’s levels.

JAKKS Pacific flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 48.9%, on average. Shares of JAKKS Pacific have risen 9.9% in the past year.

The Zacks Consensus Estimate for JAKK’s 2022 sales and EPS suggests growth of 4.9% and 227.8%, respectively, from the year-ago period’s levels.


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