By Mackenzie Tatananni

Royal Caribbean were rising Tuesday after the cruise line operator reported a fourth-quarter earnings beat and issued strong guidance for 2025.

Shares of Royal Caribbean climbed 9.9% to $260.35 after the company reported earnings of $1.63 a share for the quarter ended Dec. 31, topping the FactSet consensus estimate of $1.50. Revenue of $3.76 billion was in line with expectations.

Full-year earnings of $11.80 a share also beat Wall Street's call for $11.69, while revenue of $16.48 billion was roughly in line with forecasts.

Royal Caribbean said it "continues to be encouraged by the demand and pricing environment" and noted that bookings accelerated after the last earnings call in October, resulting in a record five booking weeks.

The company projected earnings for 2025 in the range of $14.35 to $14.65 a share. Analysts anticipate $14.45.

Chief Financial Officer Naftali Holtz said the company's "formula for success" of moderate capacity growth, moderate yield growth, and strong cost discipline is expected to deliver earnings growth of 23% in 2025.

The latest results were enough to instill confidence in Truist Securities analysts, who reiterated a Buy rating and $272 price target on the stock. The new price target suggests a potential upside of more than 4%.

Analysts led by C. Patrick Scholes said it didn't come as a surprise that Royal Caribbean started its 2025 earnings guidance "more on the conservative side."

The analysts pointed to certain results that were "stronger than Street expectations," particularly earnings before interest, taxes, depreciation and amortization, or Ebitda.

Adjusted Ebitda for the fourth quarter came in at $1.098 billion, compared to the firm's estimate of $1.054 billion and consensus of $1.065 billion.

Also on Tuesday, Royal Caribbean unveiled its plans to enter the river cruise market in 2027 with an initial fleet of 10 ships.

The initial market impact should weigh more on Viking Holdings than on Royal Caribbean, Scholes wrote. Viking has "basically owned" the river cruise sector until now, "at least in the public company space."

In the analyst's view, Royal Caribbean likely will offer river cruise services at a lower price point and quality level to the luxury brand, making them indirect competitors.

As Royal Caribbean stock traded higher, other cruise stocks were also on the rise. Carnival and Norwegian Cruise Line Holdings were up 6.4% and 5.3%, respectively. Viking Holdings, meanwhile, fell 3.2%.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 28, 2025 10:47 ET (15:47 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.