Factors Setting the Tone for Royal Caribbean (RCL) Q4 Earnings
Royal Caribbean Cruises Ltd. RCL is scheduled to release fourth-quarter 2022 results on Feb 7, 2023. In the previous quarter, RCL delivered an earnings surprise of 13%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Royal Caribbean’s fourth-quarter bottom line is pegged at a loss of $1.37 per share. In the prior-year quarter, RCL reported a loss per share of $4.78.
For revenues, the consensus mark is pegged at $2,605 million. The projection suggests an increase of 165.2% from the year-ago quarter’s reported figure.
Royal Caribbean Cruises Ltd. Price and EPS Surprise
Royal Caribbean Cruises Ltd. price-eps-surprise | Royal Caribbean Cruises Ltd. Quote
Let’s take a look at how things have shaped up for the quarter to be reported.
Factors at Play
Royal Caribbean’s fourth-quarter performance is likely to have benefited from is likely to benefit from improving booking volumes, digital initiatives and fleet-expansion efforts. During the previous quarter’s earnings call, RCL reported accelerating demand for sailings in 2023. It stated that booking volumes for 2023 doubled during the third quarter compared with the second quarter of 2022. The company noted better than expected load factors, owing to a rise in close-in bookings. Also, it reported early consumer engagement, with about 60% purchasing onboard experiences before the sailings.
Given that the majority of its destinations and markets (outside China) resumed operations, the momentum is likely to have continued in the fourth quarter. Emphasis on new innovative ships and enhanced onboard experiences are likely to have aided the company’s performance in the to-be-reported quarter. For the fourth quarter of 2022, the company anticipates total revenues to be nearly $2.6 billion.
However, supply-chain constraints, elevated expenses (including fuel and food), uncertainty revolving around pandemic-induced cancellations and changing protocols might have affected RCL’s performance in the fourth quarter. For the fourth quarter of 2022, the company expects depreciation and amortization expenses in the range of $355-$365 million. Net interest expenses for the fourth quarter are expected to be $355-365 million. The company expects adjusted loss per share in the fourth quarter to be in the range of $1.30-$1.50.
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 odds of an earnings beat.
Earnings ESP: Royal Caribbean has an Earnings ESP of +0.97%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Royal Caribbean has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Poised to Beat on Earnings
Here are some other stocks worth considering from the Zacks Consumer Discretionary sector, as our model shows that these have the right combination of elements to beat on earnings this season.
Red Rock Resorts, Inc. RRR has an Earnings ESP of +17.33% and a Zacks Rank #3.
Shares of Red Rock Resorts have gained 3.6% in the past year. RRR’s earnings surpassed the consensus mark in all the trailing four quarters, the average surprise being 66.7%.
Roku, Inc. ROKU has an Earnings ESP of +1.97% and a Zacks Rank #3.
Shares of Roku have declined 61.8% in the past year. ROKU’s earnings surpassed the estimates twice in the trailing four quarters and missed twice, the average surprise being 50.6%.
Planet Fitness, Inc. PLNT has an Earnings ESP of +2.53% and a Zacks Rank #3.
Shares of Planet Fitness have declined 5.2% in the past year. PLNT’s earnings surpassed the consensus mark in all the trailing four quarters, the average surprise being 6.6%.
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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
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