Royal Caribbean Stock Price Rose Up to 3% on FY Profits Increase

The Royal Caribbean Cruises Ltd (NYSE: RCL) stock price rose to 3% during premarket trading after the cruise ship operator announced its third-quarter results. The company has increased its full-year profit forecast for the third time, banking on rising ticket prices and sustained demand from affluent leisure travellers.

For the latest quarter, Royal Caribbean reported a 39% increase in total revenue to $4.16 billion, surpassing estimates of $4.08 billion, according to LSEG data.

After facing pandemic-related restrictions for months, cruise operators are reaping the benefits as travellers seek cruise vacations that offer a wide range of activities and entertainment in one location, often more affordable than land-based alternatives such as theme parks.

The above trend has empowered Royal Caribbean and its competitors to raise their itinerary prices, particularly in North America and Europe, as occupancy levels approach pre-pandemic levels. Royal Caribbean reported occupancy levels in the third quarter at 109.7%, up from 105% in the second quarter.

The company anticipates annual adjusted profits to fall from $6.58 to $6.63 per share, marking an increase from its previous forecast of $6.00 to $6.20 per share.

In September, Carnival, a peer in the cruise industry, narrowed its annual loss forecast and reported a third-quarter profit, benefiting from increased ticket prices and strong demand. However, investors expressed concerns about rising fuel costs.

Additionally, the company has set its sights on an adjusted profit range of $1.05 to $1.10 per share in the fourth quarter, exceeding analysts' expectations of $1 per share. The positive outlook underlines the cruise industry's ongoing recovery and ability to adapt to the evolving travel landscape.

Jason Liberty, President and CEO of Royal Caribbean Group said: “The strength of our brands and the acceleration of consumer spending on experiences have propelled us towards another outstanding quarter and a robust 2023. Looking ahead, we see accelerating demand as we build the business for 2024. Our booked load factors are higher than all prior years and at higher rates, further supporting our trajectory towards the Trifecta goals.”

Royal Caribbean Cruises (RCL) stock price. 

Royal Caribbean (RCL) stock price rose to 3% premarket after its Q3 earnings results were released.