MW Royal Caribbean's stock jumps as 'Wave season' bookings get off to a record start

By Tomi Kilgore

Royal Caribbean's quarterly profit topped expectations again, and the outlook for the current quarter is above forecasts

Shares of Royal Caribbean Group were on course for a seven-week high in early Tuesday trading, after the cruise operator extended its streak of quarterly profit beats and said forward bookings have accelerated in recent months.

The company said fourth-quarter results were driven by stronger pricing on close-in demand, which represents last-minute demand, as well as strength in customer spending while aboard cruise ships.

Royal Caribbean $(RCL)$ also provided an earnings outlook for the current quarter that was above Wall Street forecasts, while the full-year outlook was in line.

"Close-in demand in the fourth quarter remained strong on both a rate and volume basis," the company said. "Bookings have accelerated since the last earnings call, resulting in the best five booking weeks in the company's history."

The stock surged 4.9% in premarket trading, putting it on track to open around the highest closing prices seen since it closed at a record on Dec. 6.

For the quarter to Dec. 31, net income nearly doubled from a year before to $553 million, or $2.02 a share, from $278 million, or $1.06 a share. Excluding nonrecurring items, adjusted earnings per share rose to $1.63 from $1.25, compared with the FactSet consensus of $1.50.

That marked the 11th-straight quarter of bottom-line beats.

For the first quarter, the company projects adjusted EPS of $2.43 to $2.53, which is above the current FactSet consensus of $2.35.

"Wave season bookings are off to a record start, with booked load factors in line with prior years and at higher rates," the company said. Wave season is when cruise promotions peak, during the first quarter of the calendar year.

Revenue grew 12.9% to $3.76 billion, in line with expectations, as passenger ticket revenue was up 13.7% to $2.6 billion and onboard and other revenue rose 11.1% to $1.2 billion.

Net yields when excluding the impact of currency moves increased by 7.3%, well above expectations of a 6.1% improvement. This is a measure of profitability of capacity - and higher is better.

Load factor, or occupancy, was 108%, which indicates that three or more passengers were in some cabins.

For 2025, the company expects net yields to be up 2.5% to 4.5% and sees adjusted EPS of $14.35 to $14.65, which surrounds the current FactSet consensus of $14.45.

The stock has run up 16.4% over the past three months through Monday and soared 91.8% over the past 12 months. In comparison, the S&P 500 index SPX has tacked on 3.2% the past three months and advanced 22.9% the past year.

-Tomi Kilgore

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January 28, 2025 07:46 ET (12:46 GMT)

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