Royal Caribbean to Report Q4 Earnings: Things to Keep in Mind

Royal Caribbean Group RCL is scheduled to report fourth-quarter 2024 results on Jan. 28, before the opening bell.In the last reported quarter, adjusted earnings and revenues topped the Zacks Consensus Estimate by 3% and 0.6%, respectively. On a year-over-year basis, both metrics increased 35.1% and 17.5%, respectively.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Notably, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 16.2%.Trend in Estimate Revision of RCLThe Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) has increased to $1.50 from $1.49 in the past seven days. The expected figure indicates growth of 20% from the year-ago quarter’s $1.25 per share.Royal Caribbean Cruises Ltd. Price and EPS Surprise Royal Caribbean Cruises Ltd. price-eps-surprise | Royal Caribbean Cruises Ltd. QuoteThe consensus mark for revenues is pegged at $3.77 billion, indicating a 13.2% increase from the year-ago quarter.Factors Likely to Shape Royal Caribbean’s Quarterly ResultsRevenuesRoyal Caribbean’s fourth-quarter top line is likely to have increased year over year, driven by strong cruising demand, robust booking trends and a pricing environment across key itineraries. Higher consumer spending on onboard activities and pre-cruise purchases are expected to have contributed to the growth. An increase in ticket revenues, and onboard and other revenues are likely to have aided the top line.Our model predicts passenger ticket revenues, and onboard and other revenues to improve 10% and 14.7%, respectively, year over year to $2,513.6 million and $1,199.1 million. Also, the company’s focus on introducing innovative ships and enhancing onboard experiences is expected to have strengthened its offerings and driven growth.Strong demand across itineraries is translating into higher load factors, improved pricing and continued onboard revenue growth. Despite the impact of Hurricane Milton, the company expects these favorable factors to result in fourth-quarter net yield growth of 5.1% to 5.6% (constant-currency basis), building on an increase of nearly 18% in the prior year. Our model predicts fourth-quarter net yields to be $239.1 million (on a reported basis) and $240.7 million (constant-currency basis), up 5.5% and 5.6% year over year, respectively.MarginsThe company's bottom line is expected to have improved year over year in the fourth quarter, supported by book load factors aligning with prior years at higher rates, driving pricing and yield growth. Despite a challenging year-over-year yield comparison due to exceptional growth, the company’s strategy of moderate capacity growth, steady yield improvement and cost discipline is likely to have aided its fourth-quarter bottom-line performance. The company expects the fourth-quarter adjusted EPS to range between $1.40 and $1.45.However, elevated costs concerning fuel and food are likely to have hurt margins in the fourth quarter. Our model predicts total cruise operating costs to rise 15.4% year over year to $2.18 billion.What the Zacks Model Unveils for RCLOur 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 of RCL: Royal Caribbean has an Earnings ESP of +0.15%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.RCL’s Zacks Rank: Royal Caribbean has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.Other Stocks With the Favorable CombinationHere are some other stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these, too, have the right combination of elements to deliver an earnings beat this time around.Life Time Group Holdings, Inc. LTH has an Earnings ESP of +14.29% and a Zacks Rank of 1 at present.LTH is expected to register a 5.3% increase in earnings for the to-be-reported quarter. It reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, with an average surprise of 46.2%.Trip.com Group Limited TCOM currently has an Earnings ESP of +0.97% and a Zacks Rank of 1.TCOM reported better-than-expected earnings in each of the trailing four quarters, with an average surprise of 42.8%. Its earnings for the to-be-reported quarter are expected to decrease 7.1%.Rush Street Interactive, Inc. RSI currently has an Earnings ESP of +22.22% and a Zacks Rank of 1.RSI’s earnings for the to-be-reported quarter are expected to increase 800%. It reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 225%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report Trip.com Group Limited Sponsored ADR (TCOM): Free Stock Analysis Report Rush Street Interactive, Inc. (RSI): Free Stock Analysis Report Life Time Group Holdings, Inc. (LTH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks