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What's in Store for Royal Caribbean's (RCL) Q4 Earnings?

Zacks Equity Research

Royal Caribbean Cruises Ltd. RCL is likely to register decline in the bottom line when it reports fourth-quarter 2019 results. In the last reported quarter, the company delivered a negative earnings surprise of 0.9%.

What to Expect?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.41, which is lower than the year-ago quarter figure of $1.53. Over the past 30 days, the company’s earnings estimates have remained stable. The Zacks Consensus Estimate for revenues stands at $2,532 million, indicating an improvement of 8.9% from the prior-year quarter.

Factors at Play

Higher passenger ticket revenues, and onboard and other revenues are anticipated to get reflected in the company’s fourth-quarter performance. Per the Zacks Consensus Estimate, passenger ticket revenues are likely to increase 9.4% year over year to $1,807 million. Moreover, the consensus mark for the onboard and other revenues is pegged at $733 million, suggesting growth of 7.6% from the year-ago quarter.

Robust booking trends and rise in demand for cruises are likely to have contributed to the company’s fourth-quarter performance. While the company’s capacity growth is likely to have aided it in meeting the increased demand, ship innovation and technology investment are anticipated to have led to higher yields in the fourth quarter.

However, travel ban to Cuba and increase in costs are likely to get reflected in the fourth-quarter performance. Royal Caribbean estimates that the financial impact of this regulatory change is likely to result in a reduction to 2019 earnings in the range of 25 cents to 35 cents per share.

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

What the Zacks Model Unveils

Our proven model predicts 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 chances of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Royal Caribbean has an Earnings ESP of +0.61% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stock With Favorable Combinations

Here are a few stocks from the Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post earnings beat in the third quarter:

The Madison Square Garden Company MSG has an Earnings ESP of +0.78% and a Zacks Rank #3.

Norwegian Cruise Line Holdings Ltd. NCLH has an Earnings ESP of +0.41% and a Zacks Rank #3.

SeaWorld Entertainment, Inc. SEAS has an Earnings ESP of +104.17% and a Zacks Rank #3.

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SeaWorld Entertainment, Inc. (SEAS) : Free Stock Analysis Report
 
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
 
The Madison Square Garden Company (MSG) : Free Stock Analysis Report
 
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
 
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