Royal Caribbean Cruises Ahead: Q2 Earnings Surge, Dividends Return, Solid Vacations Demand & More

Royal Caribbean Cruises Ltd RCL reported second-quarter FY24 sales growth of 16.6% year-on-year to $4.11 billion, beating the analyst consensus estimate of $4.041 billion.

Passenger ticket revenues rose 18.1% Y/Y to $2.89 billion compared to last year. Total cruise operating expenses were $2.15 billion versus $1.96 billion a year ago. 

Gross Cruise Costs per Available Passenger Cruise Days (APCD) increased 4.9%. Gross margin yields increased 24.2% as-reported, and net yields increased 13.3% in constant currency.

Operating income for the quarter jumped 42.5% to $1.01 billion, with an operating margin of 26.7%. The occupancy rate in the quarter was 108.2% versus 105% last year.

Adjusted EBITDA for the quarter was $1.55 billion, with a margin of 37.8%. Adjusted EPS of $3.21 beat the consensus estimate of $2.75.

As of June 30, the group’s customer deposit balance was $6.2 billion. Royal Caribbean held $391 million in cash and equivalents as of June-end.

The company’s board of directors declared a quarterly dividend of $0.40 per share payable on October 11 to shareholders of record at the close of business on September 20

Royal Caribbean CEO Jason Liberty said, “Our momentum continues! We met our financial targets 18 months earlier than expected, have our balance sheet in a strong position, reinstated our dividend, and … we are just getting started.”

“Exceptional demand for our vacation experiences has accelerated our performance by generating significant yield growth over the past several years.”

Outlook: Royal Caribbean raised FY24 net yields growth outlook from 9% – 10% to 10.4% – 10.9% in constant currency.

RCL raised its FY24 adjusted EPS guidance from $10.70 – $10.90 to $11.35 – $11.45 against the consensus of $11.08.

The company sees third-quarter net yields to increase 6.5% to 7% in constant currency. RCL sees adjusted EPS of $4.90 – $5.00 against the estimate of $4.76.

Price Action: RCL shares are trading lower by 0.31% at $164 in premarket at the last check Thursday.

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