Royal Caribbean Cruises' Q4 Benefits From Strong Demand, Stock Surges

Royal Caribbean Cruises Ltd RCL shares surged in premarket on Tuesday after the fourth-quarter FY24 earnings.

The cruise operator reported fourth-quarter sales growth of 12.9% year-on-year to $3.761 billion, marginally missing the analyst consensus estimate of $3.765 billion.

Passenger ticket revenues rose 13.7% Y/Y to $2.59 billion compared to last year. Total cruise operating expenses were $2.05 billion versus $1.89 billion a year ago. 

Gross Cruise Costs per Available Passenger Cruise Days (APCD) increased 7.2%. Gross margin yields increased 13.8% as-reported, and net yields increased 7.3% in constant currency.

Operating income for the quarter grew 9.5% to $624 million, with an operating margin of 16.6%. The occupancy rate in the quarter was 107.6% versus 105.4% last year.

Adjusted EBITDA for the quarter was $1.09 billion, with a margin of 29.2%. Adjusted EPS of $1.63 beat the consensus estimate of $1.50.

The rise in earnings was due to a stronger pricing on close-in demand and continued strength in onboard revenue.

As of Dec. 31, the group’s customer deposit balance was $5.49 billion. Royal Caribbean held $388 million in cash and equivalents as of December-end.

Royal Caribbean CEO Jason Liberty said, “2024 was exceptional, thanks to our incredible team’s flawless execution, which drove elevated demand across our leading brands, the early achievement of our Trifecta goals, and meaningful progress on our strategic priorities.”

“2025 is shaping up to be another great year, with expected adjusted earnings growth of 23%, as our commercial and vacation experiences flywheel continues to accelerate the growing preference for our leading brands, the most innovative ships and world-class private destinations.”

Outlook: Royal Caribbean sees FY25 net yields growth of 2.5% – 4.5% in constant currency. RCL sees FY25 adjusted EPS of $14.35 – $14.65 against the consensus of $14.41.

The company sees first-quarter adjusted EPS of $2.43 – $2.53 with an estimate of $2.36. Net yields for the first quarter are expected to increase 4.75% to 5.25% in constant-currency.

Price Action: RCL shares are trading higher by 4.38% at $247.20 in premarket at the last check Tuesday.

Image via Shutterstock.