Royal Caribbean (RCL) Q4 Earnings Top Estimates, Revenues Lag
Royal Caribbean Cruises Ltd. RCL reported mixed fourth-quarter 2022 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. However, the top and the bottom line increased on a year-over-year basis. Following the results, the company’s shares moved up 5% in the pre-market trading session.
Jason Liberty, president and CEO of Royal Caribbean Group, stated, "Leisure travel strength continues as consumer spend is shifting towards experiences, with cruising remaining an attractive value proposition. The quality demand trends further exhibit the strength of our brands and the growing propensity to cruise."
Q4 Earnings & Revenues
The company reported an adjusted loss per share of $1.12, narrower than the Zacks Consensus Estimate of a loss of $1.37. In the prior-year quarter, it had reported an adjusted loss per share of $4.78 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 $2,604 million missed the consensus mark of $2,605 million. In the prior-year quarter, the company reported revenues of $982.2 million. The upside was primarily driven by strong cruising demand, better pricing on close-in demand and strong onboard spending.
During the fourth quarter of 2022, passenger ticket revenues amounted to $1,702.5 million, up from the prior-year quarter’s revenues of $617.4 million. Onboard and other revenues increased to $901.5 million from $364.9 million reported in the year-ago quarter.
Total cruise operating expenses during the quarter came in at $1,782.4 million compared with $1,135.5 million reported in the prior-year quarter.
Other Financial Information
As of Dec 31, 2022, the company had cash and cash equivalents of approximately $1,935 million compared with $1,566.2 million as of Sep 30, 2022. As of Dec 31, its long-term debt was nearly $21.3 billion compared with $19.4 billion as of Sep 30, 2022.
Booking volumes in fourth-quarter 2022 were much higher than in the same period in 2019. The company reported solid bookings with respect to North America sailings. The company stated that the cumulative booked position remains within historical ranges. It also reported a rise in pre-cruise onboard purchases (at higher prices) on a year-over-year basis. As of Dec 31, 2022, the company had nearly $4.2 billion in customer deposits.
Total revenues in 2022 came in at $8,840.5 million compared with $1,532.1 million reported in 2021.
Adjusted EBITDA in 2022 came in at $711.6 million against $(2,597.5) million reported in 2021.
In 2022, adjusted earnings per share (EPS) came in at $(7.50) compared with $(19.19) reported in the previous year.
In the first quarter of 2023, the company expects depreciation and amortization expenses to be approximately $360 million. Net interest expenses (excluding loss on extinguishment of debt) for the third quarter are expected to be in the range of $330-340 million. The company expects adjusted EPS in the first quarter of 2023 to be in the range of $(0.65)-$(0.85). The Zacks Consensus Estimate for first-quarter loss is pegged at 76 cents.
For 2023, the company expects depreciation and amortization expenses to be in the range of $1,470-$1,490 million. Net interest expenses (excluding loss on extinguishment of debt) for the year are expected to be in the range of $1,310-1,350 million. For 2023, the company anticipates Adjusted EBITDA to surpass 2019 levels. Adjusted EPS during the year is anticipated in the range of $3-$3.60.
Zacks Rank & Key Picks
Royal Caribbean has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are OneSpaWorld Holdings Limited. OSW, Manchester United plc MANU and Las Vegas Sands Corp. LVS.
OneSpaWorld currently sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 84.2%, on average. Shares of the company have increased 7.5% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 24.2% and 91%, respectively, from the year-ago period’s levels.
Las Vegas Sands sports a Zacks Rank #1. LVS has a long-term earnings growth rate of 4.9%. The stock has increased 27.2% in the past year.
The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates a rise of 99.2% and 217.5%, respectively, from the year-ago period’s estimated levels.
Manchester sports a Zacks Rank #1. MANU has a trailing four-quarter earnings surprise of 34.4%, on average. Shares of the company have gained 58.2% in the past year.
The Zacks Consensus Estimate for MANU’s 2024 sales and EPS indicates a rise of 11.4% and 27.8%, respectively, from the year-ago levels.
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