Royal Caribbean Cruises Ltd (NYSE:RCL) shares rose 4.4% on Tuesday after the cruise operator beat second-quarter profit estimates and raised its full-year outlook on strong close-in demand and cost efficiencies.
The company posted adjusted earnings per share of $4.21, topping analyst estimates of $3.98, though the figure was down 4% from a year earlier. Revenue came in at $4.8 billion, up 6% year-over-year and just shy of the $4.82 billion analysts had expected.
Net yields rose 1.9% as-reported in the quarter, while adjusted EBITDA reached $1.83 billion. Load factor stood at 110%, and net cruise costs excluding fuel per available passenger cruise day (APCD) rose 4.4%. Gross margin yields fell 5.6%.
Royal Caribbean lifted its full-year adjusted EPS guidance to a range of $17.73 to $17.87, with a midpoint of $17.80, up $0.50 from the prior midpoint of approximately $17.30 and representing 14% growth year-over-year. The company also guided full-year revenue growth of 9% and net yields of 2.35% to 2.85%.Jefferies said the full-year guidance raise, rather than the second-quarter beat, is the more significant factor for investors and should drive a neutral reaction in the shares.
The bank noted that second-quarter results accounted for less than half of the full-year EPS increase, with the balance driven by improvements in fuel costs, ex-fuel costs, depreciation and amortization, interest expense, foreign exchange and a lower share count.
Jefferies flagged that full-year yields are now about 20 basis points lower, citing a "modest, near-term" impact on bookings that bears watching.
For the third quarter, Royal Caribbean guided adjusted EPS of $6.26 to $6.36, in line with analyst estimates of $6.26. The company forecast revenue growth of 8% year-over-year, with net yields approximately flat as-reported.