Royal Caribbean Cruises Earnings: Margins Shrink as Costs Rise
Royal Caribbean Cruises Ltd. (NYSE:RCL) swung to a loss in the second quarter, missing analysts’ forecast. Royal Caribbean Cruises operates in the cruise vacation industry. It owns five cruise brands: Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France.
Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?
Royal Caribbean Cruises Ltd. Earnings Cheat Sheet
Results: Reported a loss of $3.7 million (2 cents per diluted share) in the quarter. Royal Caribbean Cruises Ltd. had a net income of $93.5 million or 43 cents per share in the year-earlier quarter.
Revenue: Rose 3% to $1.82 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Royal Caribbean Cruises Ltd. fell short of the mean analyst estimate of 3 cents per share. Analysts were expecting revenue of $1.84 billion.
Quoting Management: “The steady drumbeat of negative news emanating out of Europe is certainly having an impact,” said Richard D. Fain, chairman and chief executive officer. Fain continued, “As a result, we are seeing pluses and minuses in the different geographical markets – North America is holding up reasonably well; Asia is a big plus; but Europe is a pretty consistent minus. Overall we have seen about a 100 basis point drop in our yield projections, but we expect to offset over half of this decline with lower spending.”
Revenue has risen the past four quarters. Revenue increased 9.7% to $1.83 billion in the first quarter. The figure rose 10.7% in the fourth quarter of the last fiscal year from the year earlier and climbed 12.7% in the third quarter of the last fiscal year from the year-ago quarter.
The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by 5 cents, and in the fourth quarter of the last fiscal year, it was ahead by 3 cents.
The company’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $47 million in the first quarter, a profit of $36.6 million in the fourth quarter of the last fiscal year and $399 million in the third of the last fiscal year.
Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from $1.69 a share to $1.65 over the last ninety days. The average estimate for the fiscal year is now $1.98 per share, down from $2.01 sixty days ago.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
Don’t Miss These Hot Additional Stories: