Royal Caribbean Cruises Ltd. (RCL) on Q1 2021 Results - Earnings Call Transcript
Operator: Good morning. My name is Shelby, and I'll be your conference operator today. At this time, I would like to welcome everyone to Royal Caribbean Group Business Update and First Quarter 2021 Earnings Call. I would now like to introduce, Chief Financial Officer, Mr. Jason Liberty. Mr. Liberty, the floor is yours. Jason Liberty: Thank you. Shelby. Good morning everybody and thank you for joining us today for our business update and first quarter earnings call. Joining me are Richard Fain, our Chairman and Chief Executive Officer; Michael Bayley, President and CEO, Royal, Caribbean International; and Carola Mengolini, our Vice President of Investor Relations. Richard Fain: Thank you, Jason, and thank you all for joining the call and thank you Carola for your help and consistent support over many years of Royal Caribbean. You all know, it's been painful to pass the 1-year mark since we suspended sailings in March of 2020 and to keep seeing most of our beautiful ship still sitting in anchor. However, I'd like to comment on some of the dramatic positive developments that we've just mentioned. The big change has been a significant improvement in the extent and the quality of our dialog with the CDC. As I have said elsewhere, scientific knowledge does not advance well in a vacuum. More and better exchange of information and more and better understanding of all the perspective always leads to a better and healthier outcome. The CDC has recently significantly increased its efforts in this regard and we really appreciate and we would like to - for undertaking this important effort. Last night the CDC issued multiple very constructive clarifications and the amplifications of this conditional sale order and addressed many of the items of concerns us in the order in a manner that takes into account the recent advances in vaccines and medical science. We believe that this communication really helps us to see a clear and achievable pathway forward to a safe and healthy cruising in the near future. Jason Liberty: Thank you, Richard. Before I start like Richard, I want to again thank our teams across the whole enterprise for their dedication and tireless efforts during these unprecedented times. I will now start to discuss our first quarter performance. This morning we reported an adjusted net loss of $1.1 billion or $4.44 per share for the first quarter of 2021. While reporting these type of results continues to be painful, we are excited about the fact that little by little the flywheel is starting to spin. Furthermore, of the latest news by the CDC, as it relates to our resumption of service in the U.S. is quite encouraging. During the first quarter of 2021, we delivered memorable vacations to over 55,000 guests through our Royal Caribbean TUI Cruises International and Hapag-Lloyd brands. Moreover, our teams are diligently working on the health protocols and startup activities needed to begin operations on an additional 11 ships this summer. While these activities are extremely encouraging they also put some additional pressure on our cash burn in the short term. Having said this, we are also very encouraged by our customer deposit balance, which as of today is approximately $2 billion compared to the $1.8 billion that was shared this morning related to the end of the first quarter. Operator: Your first question is from Robin Farley of UBS. Robin Farley: Have a question about the restart obviously great news - just trying to understand it is you can go forward and then there is a separate timeline for restarting with the ship that allows non vaccinated passengers out of the U.S., it seems that way, but I just wanted to kind of get clarification on that? And then just as my follow-up would be on the return to service expenses versus just typical layup, how much if you - if we think about per month lay-up cost per ship, and then what is that with restart costs for maybe that sort of monthly three months, say, heading into restart, what the difference is in lay-up versus lay-up and restart? Thank you. Jason Liberty: So Robin, on the first question, which I'm sure is an amazing question, I don't think we got most of it. It broke up about 50% of it. So we actually didn't actually hear what you asked. I'll just comment real quick as it relates to - on the cost side, and then you can re-ask the first part of your question. Yes, we really have tuned in our lay-up costs. And of course, we've kept our ships generally in a warm state. So that as we restarted our ships, we would be able to do that expeditiously and at a reasonable cost. But as it relates to the return to service as we ramp the ships back up, those costs are still kind of very fluid, which is why we're not guiding on them as we need to take into consideration testing and crude movement and vaccinations and maybe other things that might be part of that equation. That might be different itinerary by itinerary. So we're not yet ready to kind of guide on that. What I would tell you is we are being very - we're very focused to make sure that, that as we're spending, that we're being very thoughtful about it. And of course, at the same time, as we're launching these ships, we're also getting the revenues and customer deposits that are associated with that. So I'll just pause there and let you ask the first part of your question, so we can hear it and hopefully give you a thoughtful answer. Robin Farley: Great. Well, hopefully, you can hear me a little bit better. On the first question, I just wanted to understand, obviously, very good news overnight. For the time frame, is it that there will be kind of two different restart time frames that you can today go forward with a fully vaccinated ship out of the U.S., but there will be a separate time frame for ships that have a mix of vaccinated and unvaccinated passengers, is that how to interpret the timing? Thanks. Michael Bayley: Hi, Robin. It's Michael. As Richard commented, we received these modifications in commentary late yesterday evening. And we've gotten close to the CDC to clarify some of the comments and what have you. But fundamentally, yes, you're correct. There will be really two pathways. One pathway for vaccinated crew and largely vaccinated guests that meet the threshold that they've defined. And that would mean that there wouldn't be a requirement for a simulated voyage, et cetera, and there would be a different expectation on protocols and planning. So it's a faster route. And then for ships that wouldn't have - wouldn't meet that threshold for whatever reason, there would be a different timeline and a different set of protocols and requirements. So fundamentally, there's two path ways. It's not that simple, but that's a way of simplifying. Richard Fain: And I think we need to make clear that - reemphasize, as Michael just did. There's still a lot of uncertainty about this. And I don't think you should think of these as two completely divergent processes. Obviously, just as there are in other areas in society, you treat people who have been vaccinated different than situations where you don't have vaccinations. But what is nice about this is that there are, in effect, both are viable pathways under the CDC letter that we got. Jason Liberty: And I think just to add to that, I think the acknowledgment that the vaccines are really transformational is very exceedingly helpful. I mean it's something we all knew was coming, but it's very positive. Operator: Your next question is from Steve Wieczynski of Stifel. Steven Wieczynski: So my first question is going to be a bunch of CDC questions that hopefully - I don't know if you're going to be able to answer - you won't be able to. But it's a three-part question, so prepare yourself for some fun here. When you look at the mandates that have been laid out. I mean, calling for 98% of crew and 95% of passengers to be vaccinated, do you - I mean, the first question is, do you think getting to those thresholds will be easy to achieve? The second part of that is going to be the kid component. How are kids accounted for under those percentages? And if I'm reading that right, it seems like getting kids on board might be difficult during the CSO time frame. And then the third part of this is, do you think the CDC's cautionary travel outlook for the Bahamas could cause some panic with your potential customer base? Michael Bayley: Steve, so on the 98%, 95% mandate or guidelines - and remember, it's a guideline. So there's - you can meet that threshold, and you don't have to meet that threshold, and there's different pathway. We know from surveys of our customers who've been booking since January, that over 80% of our customers have already told us, they're either vaccinated or will be vaccinated when they cruise. So that's since January. So there's an overwhelming, certainly for our customer base, people are just saying, I'm getting vaccinated. And as you skew older, the percentage increases quite significantly. Mainly because, of course, when the vaccination started, it started with the older age group first, et cetera, et cetera. For the crew, interestingly, every year, we offer - we don't mandate flu vaccines for our crew members, and we've been doing that for many, many years. And the crew, typically, the vaccination rates of our crew members for flu is around the mid-90%. They just voluntarily take the vaccine. We surveyed our crew some months ago, and we stay in touch with the crew through surveys and various forms of communication. And in the survey that we sent out, I'm going to say it was at the end of last year or the beginning of this year, we asked our crew members, first of all, "Have you been vaccinated? Are you getting vaccinated? And will you get vaccinated?" And we had over 98% positive response from our crew saying, "Yes, we're going to get vaccinated." So I think there's just - I think it's somewhat a natural event. Crew used to getting vaccinated for flu, and they're certainly willing to get vaccinated for COVID. We do understand for health or religious reasons or belief reasons that some people won't want to, and that's been in place for many years in terms of how we vaccinate for flu. On the kids, I think we obviously take a look at our kid count, kid population and what have you. We think this is the next phase. And we know that the vaccinations are now eligible for children, 16 and over. We've been told that in the coming weeks and months that that age limit will likely drop to 12, and we're encouraged by that. And then for kids 11 and under, obviously, we carry a lot of kids 11 and under. But relatively speaking, as a percentage of our total guest count, it's quite a small number. So we're not overly concerned with that. And again, as Richard pointed out, we received these modifications late last night. We really do have to sit, study and discuss with the CDC and understand all of these different nuances. But we're not discouraged by this in anyway. Steven Wieczynski: Okay. Got you. Richard Fain: And Steve, just - I think we ought to make it clear that we've been operating and have announced cruises, some of which are requiring full vaccination and some of which do not. And so, I think we consider it constructive that the CDC has looked at this with a dual pathway approach, much as we have taken. Steven Wieczynski: Okay. Got you. And then second question, Jason. If the timeline is correct here, and you can start North American cruising sometime over the next couple of months. And from there, you continue to bring ships back online over an extended period of time. The question is, do you feel like your current liquidity position is adequate at this point, meaning you feel comfortable enough with where you guys sit today? Jason Liberty: I think we feel like we are in a very strong liquidity position and we're booked the real focus here is getting the ships back on the water and of course as that's occurring at the same time, the customer deposits in revenues and so forth start coming in. So I think we feel very good and of course, we're also remaining to be opportunistic and looking at ways to improve our balance sheet and negative carry and so forth. So, but overall, Steve, I think we feel like we've taken a very prudent actions to make sure that we're in a position of shrink. Operator: Your next question comes from Jaime Katz of Morningstar. Jaime Katz: I'm curious if you have any comments on consideration of the sale of anymore of the fleet or whether you feel the fleets is good as is given there have been so many these deals across the industry scrap across the industry recently. And then, if you comment on the percentage of workforce that you're getting from India and then how that might constrain the ability to staff the ship sufficiently going forward now that there is some sort of overlaying constraint on it. That would be really helpful? Thanks. Richard Fain: Yes, sure. Jamie. I'll take the first one and then allow Michael will do the mix in terms of crew from India. But as it relates to our fleet even for some of the ships that we've sold, the way that we kind of approached this always is just understanding whether a ship is a good fit for the brand or still good fit for the brand or if we can invest in our ship to make sure it's a good fit for the brand, and if not, we look in and we're opportunistic about this, but I think we've scrap some ships, we've sold some ships. We typically sell about a ship a year. But overall, we feel really good about the fleet and as you've heard us say in the past, these ships are really always cash flow positive. And so for us to part ways with them, but it has to be convinced it's the right strategic reason for us to do so. Michael Bayley: And Jamie. On the cruise situation in particularly as it relates to India. Yes, I mean this is an unfortunate what's occurring in India over the past week or so. There has been multiple travel restrictions placed on the Indians with traveling through to various countries and what have you so we did temporarily suspend our crewing activities in India as we understand how this will work out. The beauty, of course of accruing model is that almost from the very beginning we accrude from literally over 100 countries around the world up. Some countries like India have significant volume of employees who come from India, but we have large populations to come from many other countries around the world. So we are obviously super sympathetic about what's happening in India because we do have many loyal employees who've been with us for many, many years, but we obviously pretty confident this will work out in the coming months and we have the ability to crew and change of accruing based upon all the circumstances. So discouraging what's occurring in India, but our model is very robust. So we're encouraged by the model that we have. Operator: Your next question is from Brandt Montour of JPMorgan. Brandt Montour: Hi, good morning everyone and thanks for taking my questions. And obviously, I saw positive news today back on the say one more on the CDC, if I may. With the CSO still in place outside, let's say, outside of what we've talked about so far the vaccination specific boggie. What was the biggest change or the biggest changes overnight for you? And does this change your best guess for the ultimate capacity you think you'll have sailing at the end of this summer versus say, what you saw 24 hours ago? Michael Bayley: Hi, Brandt. As Richard commented in his opening statement, what really - first of all, we've been in very constructive dialog with the CDC over the past few weeks and beyond the CDC with the inter-governmental agency group that representing many different departments of the government, and I think that dialog allowed the industry to talk realistically about many of the elements of the CSO that which is unrealistic or unable to be executed with but crafted. What we saw last night was very encouraging because it wasn't one or two things. It was multiple additions and corrections to many of the elements of the existing CSO that was the really challenging and very, very difficult particularly as it relates to what's occurring with vaccine. So I think the mood of the Royal Caribbean last night and late into the night. And then just speaking also for some of our industry colleagues with simply positive that all of this dialog that was constructive that resulted in clearly being heard and so I wouldn't say there's any one thing that's just many, many things. But certainly the vaccines are the major foundational game change in element of this. Thank you Brandt. Brandt Montour: Okay, that's helpful. Just a quick follow-up on sort of how you're thinking about occupancy and load, Jason, you mentioned that sort of bookings and to-date for the summer sailings are around sort of 30% of expected revenue. Is that that's sort just to clarify, that's not of what your total capacity would be on those sailings that's just of what your target load would be and then if I and then sort of a second part of that would be sort of what do you think the range of that target is for in vaccination sailings so reconcile that with what you're doing in Singapore and non-vaccination sailings and that's it for me? Jason Liberty: Yes, what it is or the statement was really relating to what we expected it to be and of course hopefully most of these sailings we've negotiated or we've had conversations in terms of what those load factors would start off being and so we've been very kind of thoughtful about what our expectations are going to be whether we're turning in the Bahamas or whether we're turning in Israel and so forth. So I think obviously we saw a lot of encouraging news here from the CDC. But the sailings in which we've announced are really pursuing that take place outside of the U.S. in boards. But all that this is as Michael and Richard will talk about. This is an evolving story. And if, as long as we can continue to believe that we can operate in a safe manner, making sure our guests have an incredible experience and we can do that in a way that it is improving our financial position that those are the kind of three guiding lights that are, guarding our diligent decisions Operator: Your next question is from Stephen Grambling of Goldman Sachs. Stephen Grambling: I guess turning to ship growth and capacity increases. What is a reasonable range of net capacity growth, as we look over the next couple of years and I guess have any of the dispositions effectively been pull forward of future retirement. So we should expect maybe last going forward? Michael Bayley: Well, I think first overall industry-wide as I commented on the last call, where the growth rate, which was probably around 6% is probably going to be around 4%. So you're going to see less growth there. I think for us, our planned capacity growth is, it's kind of laid out as it relates to the ships that are coming online. Again, I wouldn't focus too much on the retirement story, because for us, we continue to just be thoughtful and be opportunistic about the opportunity to introduce into to sell ships, if that opportunity arises, but for the most part, I think we feel the fleet that we have today and the new ships that are coming online in that cadence is how we would expect our business to grow and there might be some retirements. I wouldn't say it's an accelerated retirement program based off of what we've done. I would just say we plan to kind of operate our business and manage our fleet and invest in our fleet. How we've done it on a pre-COVID basis. Stephen Grambling: And perhaps a related follow-up may be appears excited basically cost improvements and efficiency improvements from the mix of new ships and/or changes in the cost structure. Can you give us any color on how you see that the mix of new ships impacting net yield and net cruise costs or any big buckets of opportunity for permanent changes in how you operate? Michael Bayley: Yes, well, I mean, I think we've also talked about this and we talked about quite a bit on the last call is - so obviously as the new capacity comes on, they are more efficient, especially on a fuel standpoint. And they also generate a much higher yield profile because of the inventory mix onboard revenue opportunities that come along with our new capacity, but during this time, we have looked at our cost structure, we have taken action on our cost structure to ensure that as we come out of this I think I use the term in our wedding weight and so we've identified and we've implemented and we are implementing several cost actions in order to improve our margins. And then also, I would just add, at the same time we want to make sure that the guest experience is protected, the employee experience is protected. And so a lot of this comes through with automation and that's just coordinating better enterprise wide to make a better margin decisions. Stephen Grambling: Just one quick follow-up and I guess between the vaccine only type Cruises and then those that are more open. Are you seeing any differences in the cost structure between those two as you think about just kind of dual approach potentially can CDC? Michael Bayley: Hi, Steven, it's Michael. Yes, I mean there is a different cost profile, but again we need a little bit of time to work our way through this, but there is more protocols with non-vaccines and with vaccine and there is more testing requirements and what have you so. There will be slightly more cost, but we really do need to work our way through that and I think there's a lot of averaging and scale. So the great news is our teams in it looking down and we're looking at all of this and trying to understand it and plan. So I think we'll have more clarity in the coming days and weeks. Operator: Your next question is from Paul Golding of Macquarie. Paul Golding: Thanks so much for the question. I was wondering, I saw that for 2021 you cited a 75% new booking rate as opposed to 25% FCC and I guess, I was wondering if there was something I don't know if you've given 2022 mix number, but is there something structural there in the near to medium term around marketing you're able to, maybe take some savings there as demand seems to be strong, despite low levels of marketing? And then my second question is around Caribbean homeport versus U.S. homeport. I was wondering if there is anything structural about it for whatever reason you decided the season wasn't the one for robust U.S. homeport setup. Are there savings or are there structural costs that outpaced what the U.S. home port itinerary mix would look like? Thanks. Jason Liberty: Yes. So on the first one as it as it relates to the bookings that are coming in the profile of new bookings versus the application of FCC's is really kind of a broader commentary around the bookings that we've been taking on 2022. We see a very similar profile where you about - around that percentage is also for our new bookings versus the application. Again it's really early days, I think to try to kind of piece those types of stats will result in some type of sales and marketing savings and time will tell what's clear to us if there is really strong demand and really some activity on the marketing side is able to generate the demand, which is I think very encouraging for us overall. And then I think on the cost side as it relates to turning in different ports around the world. there is always different port fees vaccinations, testing and so forth, can all kinds of play in the mix of it, but I think for the most part, it's not really a cost differential. I think, it's more about our ability to get our passengers to those locations turn of those locations and then deliver four classification experiences. Paul Golding: Great, thanks so much. Michael Bayley: Hi, Paul. Just one comment on sales and marketing. We always internally-based, what was going to happen with wave in ‘21 understanding we wouldn't really obviously have a wave as we've historically used to having a wave, and normally wave starts sometime into the second or so week of January and then run through February, peaking and then dropping off in March. And we certainly didn't get a wave this year. But then in March of this year, we had a really strong March and so we looked at the volume of bookings that came in March of this year and we compared it with wave in 2019, which was our last real wave period. And our bookings in March of this year equaled peak wave month in ‘19. So that was, I mean that was quite an amazing number, so we started to see wave coming in March instead of January and certainly the volume was impressive. But to the point of this is, that ironically, marketing and sales investment during that month was way below what we invested in 2019. So I mean it's an interesting fact that we had so much demand with very little investment, which I think speaks to what we're seeing and believe is occurring in the market with pent-up demand. I mean we know that - we've been told savings rate in the U.S. with U.S. consumers increased by 2.5 trillion. The credit card debts, down by $100 billion and our surveys tell us that the consumer is increasingly optimistic about the future, that the worst is behind them that they are going to go on a vacation. And so I think that one statistic for March, we interpret is incredibly positive and speaks about what we think is going to be amazing pent up demand that's going to be unleashed particularly for '22. Paul Golding: Thanks for the color that I think obvious my point or my question around that is that it seems like the consumer is seeking out the experience and so I wondered if there was some medium-term efficiency there, but I appreciate the color on the volumes on the bookings line. Thanks so much. Operator: Your next question is from Greg Badishkanian of Wolfe Research. Frederick Wightman: Hi guys, it's actually Fred Wightman on for Greg. I just wanted to follow up on Michael's comments just now on the bookings in March, totally get that it's sequentially stronger than January, February in the 2019 commentary was super helpful. Have you seen a change in the SKU about where those bookings are taking place as far as 2021 versus 2022 more recently, just given some of the improving dialogs with the CDC and what do you think that means for the prospects of a potential July restart here domestically? Michael Bayley: Well, over the past few weeks we've introduced multiple products home porting outside of the U.S. in the Caribbean, which we've spoken about and the demand for those products is been quite robust. I mean we are quite pleased with the demand that we've seen for those products. And certainly we see things moving into ‘22, which is natural. We're heading into June and June traditionally is the month were bookings tend to heavily SKU more towards the next year rather than the current year. And then that certainly holding true for from what we're seeing. Richard Fain: Yes. And I think just to just add a couple of comments to it. As we commented a little bit earlier obviously the booking activity is skewing a little bit older, and what you would expect because of the vaccination comments in terms of the percentage of our guests that say they've either have been vaccinated or they plan on getting vaccinated. 2022 especially out of the North American markets, the U.K. markets and so forth, book actually pretty similar to what you would see in a typical year while the 2021 bookings obviously have more recently have gravitated to the sailings that we have announced you had at the Bahamas, and Israel and so forth. So it's, I think it's very clear as Michael said, people are thinking that the worst is behind. There's a lot of these different statistics as it relates to our credit card debt, and savings and people's propensity to get back out there and in vacation and I think 2022 so far looks like it's behaving like we saw pre COVID. Frederick Wightman: That's helpful. And the release sort of teases the prospect of return to Alaska this year. I'm wondering if you could just touch on the mechanics for that, how realistic that might be and then what the next steps or clarifications that you might need to hear to make that happen would be? Jason Liberty: Yes. So that's a slightly complex one specifically with respect to Alaska because of course Canada has put in place a stop until throughout the season. And so in order to restart the Alaska season. We review it need a waiver from the passenger vessel services or Canada would have to allow at least technical stops. And we are working on both and others are working on both. But we can't be surely where that will end up. But I think given the momentum there is reason for some hope, but I think we're – that's a sufficiently complex and confusing situation. I don't think we're going to put odds on one way or the other. I also think we need to be just a little bit careful when we're talking about reading into these bookings. There are still a lot of issues and have yet to be resolved with respect to the CDC existing order. The bookings that have taken place have been in a period of high uncertainty, are these cruises going to be sailing, will they go where they want. What will be the protocol? So there is a lot of uncertainty. And while we try and read a lot into it and the one thing that I think we are feeling comfortable at which is the reason lot of pent-up demand. There is too many fluid factors I think to read too much in the some of the specifics of what is this particularly 2022. I think it's all terrible encouraging for 2023 and it's very encouraging to 2022, but the specifics of each of these is going to be difficult to read into until things calm down and there is much more certainty about where it's leading to. But as to Alaska, I think specifically while we're optimistic and we are working to make that happen with all these other factors. We do think that we will be in time for the Alaskan season and we're obviously hopeful that we'll be able to solve the issue with Canada in either in one of these two ways. Operator: Your next question is from Patrick Scholes of Truist Securities. Patrick Scholes: Question, it appears that the next step that the CDC is looking for is to complete Phase 2A in your opinion, what's the realistic timeline at this moment in which you think you could complete Phase 2A? Michael Bayley: Hi Patrick, I can't give you like a week, so firmly weeks and days. I think again as we understood and interpret what we received last night if you're planning on a highly vaccinated cruise there will be no requirement for a simulated voyage and the previous 30-day notification and process for simulation. And then the subsequent 60-day for notification in the process for your first actual revenue sailing is effectively been removed. And so, a highly vaccinated cruise can literally as soon as you have your port plan ready and everything lined up. You can submit your request to cruise and they will try their best to get your response within five days. So you can see that the timeline and the process has improved quite significantly. So, I think there is the process of accruing the ship obviously, and then the vaccination process. So, I think the target that's been stated and that we've all been working towards is a mid July, and I think that after what we received last night is looking very realistic. But again to Rich's we still got a lot to clarify, but I think this commitment to mid July is looking very realistic based upon what we saw last night. Operator: Our final question... Michael Bayley: So we have time, yes final question yes that’s will be great. Operator: Your final question is from Vince Ciepiel of Cleveland Research. Vince Ciepiel: Hi, thanks for taking my question, curious if there are some factors we should keep in mind that would make 2022 yield, maybe not as comparable to 2019, just in light of pricing being ahead, it sounds good you had mentioned that new capacity should maybe be a bit of a tailwind. But are there any offsets from a mix perspective or the itineraries that you might be running in 2022 versus 2019 or even getting back to those peak 107% or 108% occupancy levels that might impact the comparability of the 2022 yields to 2019 yield? Michael Bayley: I think it's really too early to kind of timing. Structurally, the additional capacity as I was getting rid of some of our older tonnage in negative is the sale Azamara which is a higher yielding brand versus the average, but for the most part, I think it really kind of depends on how the business builds going into next year as Michael said really as we start getting here into the early part of the summer is really in 2022 really begin to build up, but there is not necessarily something structurally as to the fleet or deployment that's going to make a significant change on 2022. Vince Ciepiel: And as a follow-up Richard mentioned, the uncertainty and severity of the situation, and I think when you look at your deposits, they've been stable for a number of quarter at 1.8 billion, but still a ways away from that 3.4 they were at one point. So curious what you think it takes for those to rebuild, it seems like that's a key part of helping to delever a bit as well, and if there is a path for that kind of in the second half of this year as confidence hopefully returns and the booking curve lengthens a bit. Michael Bayley: Yes, I mean I think first of it's been stable now for several quarters, it's now building and it's building because where are - we're able to provide clarity on ships and deployments that are coming back up into service, and so I think the consumer is gaining confidence, but I think they're looking for us for clarity on exactly which ships are going to be coming up and when so, that they can plan and count on their vacation experience and I think as obviously a lot of this is beginning to - in terms of some of the barriers are beginning to evaporate that confidence is building and hopefully soon we move back to those level on a customer deposit standpoint. Richard Fain: So, thanks Vince. Thank you all for your assistance today Shelby with the call, and we thank you all for your participation and interest in the company. Carola will be available all day today for any follow-up questions you might have, and as always we wish everybody a great day and please stay healthy. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. And you may now disconnect.
Royal Caribbean (NYSE:RCL) Maintains Positive Outlook Amid Market Volatility
Royal Caribbean (NYSE:RCL) is a prominent player in the Leisure and Recreation Services sector, known for its extensive cruise offerings. The company competes with other major players like Carnival Corporation and Norwegian Cruise Line. On March 25, 2025, Susquehanna reaffirmed its Positive rating for RCL, advising investors to hold their positions. At that time, RCL's stock price was $225.02.
Investors looking for value stocks in this sector might consider RCL and Airbnb, Inc. (ABNB). According to Zacks Investment Research, RCL holds a Zacks Rank of #2 (Buy), indicating a stronger earnings outlook compared to Airbnb's Zacks Rank of #3 (Hold). This suggests that RCL may be a more attractive option for value investors due to its improved earnings estimates.
RCL's stock price of $225.02 reflects a slight decrease of 0.38, or approximately -0.17%. The stock has traded between $223.17 and $227.32 today. Over the past year, RCL's stock has seen a high of $277.08 and a low of $125.06, showcasing its volatility in the market.
The company's market capitalization is approximately $60.56 billion, indicating its significant presence in the industry. With a trading volume of 1,677,291 shares on the NYSE, RCL remains an actively traded stock, attracting the attention of investors and analysts alike.
Royal Caribbean (NYSE:RCL) Maintains Positive Outlook Amid Market Volatility
Royal Caribbean (NYSE:RCL) is a prominent player in the Leisure and Recreation Services sector, known for its extensive cruise offerings. The company competes with other major players like Carnival Corporation and Norwegian Cruise Line. On March 25, 2025, Susquehanna reaffirmed its Positive rating for RCL, advising investors to hold their positions. At that time, RCL's stock price was $225.02.
Investors looking for value stocks in this sector might consider RCL and Airbnb, Inc. (ABNB). According to Zacks Investment Research, RCL holds a Zacks Rank of #2 (Buy), indicating a stronger earnings outlook compared to Airbnb's Zacks Rank of #3 (Hold). This suggests that RCL may be a more attractive option for value investors due to its improved earnings estimates.
RCL's stock price of $225.02 reflects a slight decrease of 0.38, or approximately -0.17%. The stock has traded between $223.17 and $227.32 today. Over the past year, RCL's stock has seen a high of $277.08 and a low of $125.06, showcasing its volatility in the market.
The company's market capitalization is approximately $60.56 billion, indicating its significant presence in the industry. With a trading volume of 1,677,291 shares on the NYSE, RCL remains an actively traded stock, attracting the attention of investors and analysts alike.
Royal Caribbean Group's Strong Financial Performance in Q4 2024
- Royal Caribbean Group (NYSE:RCL) reported an earnings per share (EPS) of $1.63, surpassing the estimated $1.50.
- The company achieved year-over-year revenue growth, increasing from $3.33 billion to $3.76 billion, despite slightly missing estimates.
- Royal Caribbean's stock price experienced positive movement, reflecting the fourth consecutive quarter of surpassing consensus EPS estimates.
Royal Caribbean Group, listed as NYSE:RCL, is a prominent player in the cruise industry, offering a wide range of vacation experiences through its diverse fleet. The company competes with other major cruise lines like Carnival Corporation and Norwegian Cruise Line Holdings. On January 28, 2025, Royal Caribbean reported earnings per share (EPS) of $1.63, exceeding the estimated $1.50, showcasing its strong financial performance.
During the Q4 2024 earnings call, key figures like CEO Jason Liberty and CFO Naftali Holtz discussed the company's financial results and strategic initiatives. Despite revenue slightly missing the $3.76 billion estimate, the company achieved year-over-year growth, with revenue increasing from $3.33 billion in the same period last year. This growth is attributed to strong pricing and onboard revenue strength.
Royal Caribbean's stock price saw positive movement following the earnings release, as highlighted by the Zacks Consensus Estimate. The company reported an 8.67% earnings surprise, with EPS improving from $1.25 in the previous year. This marks the fourth consecutive quarter of surpassing consensus EPS estimates, reflecting consistent financial performance.
The company's financial metrics provide insight into its market valuation. With a P/E ratio of 25.10, investors are willing to pay $25.10 for every dollar of earnings. The price-to-sales ratio of 4.38 and enterprise value to sales ratio of 5.62 indicate the market's valuation of Royal Caribbean's revenue and total worth. However, a debt-to-equity ratio of 2.75 suggests significant reliance on debt financing.
Despite these financial achievements, Royal Caribbean faces potential liquidity challenges, as indicated by a current ratio of 0.17. This ratio measures the company's ability to meet short-term obligations, and a low value may suggest difficulties in covering these liabilities. Nonetheless, the company's earnings yield of 3.98% offers a return on investment for shareholders, highlighting its profitability.
Royal Caribbean Group's Strong Financial Performance in Q4 2024
- Royal Caribbean Group (NYSE:RCL) reported an earnings per share (EPS) of $1.63, surpassing the estimated $1.50.
- The company achieved year-over-year revenue growth, increasing from $3.33 billion to $3.76 billion, despite slightly missing estimates.
- Royal Caribbean's stock price experienced positive movement, reflecting the fourth consecutive quarter of surpassing consensus EPS estimates.
Royal Caribbean Group, listed as NYSE:RCL, is a prominent player in the cruise industry, offering a wide range of vacation experiences through its diverse fleet. The company competes with other major cruise lines like Carnival Corporation and Norwegian Cruise Line Holdings. On January 28, 2025, Royal Caribbean reported earnings per share (EPS) of $1.63, exceeding the estimated $1.50, showcasing its strong financial performance.
During the Q4 2024 earnings call, key figures like CEO Jason Liberty and CFO Naftali Holtz discussed the company's financial results and strategic initiatives. Despite revenue slightly missing the $3.76 billion estimate, the company achieved year-over-year growth, with revenue increasing from $3.33 billion in the same period last year. This growth is attributed to strong pricing and onboard revenue strength.
Royal Caribbean's stock price saw positive movement following the earnings release, as highlighted by the Zacks Consensus Estimate. The company reported an 8.67% earnings surprise, with EPS improving from $1.25 in the previous year. This marks the fourth consecutive quarter of surpassing consensus EPS estimates, reflecting consistent financial performance.
The company's financial metrics provide insight into its market valuation. With a P/E ratio of 25.10, investors are willing to pay $25.10 for every dollar of earnings. The price-to-sales ratio of 4.38 and enterprise value to sales ratio of 5.62 indicate the market's valuation of Royal Caribbean's revenue and total worth. However, a debt-to-equity ratio of 2.75 suggests significant reliance on debt financing.
Despite these financial achievements, Royal Caribbean faces potential liquidity challenges, as indicated by a current ratio of 0.17. This ratio measures the company's ability to meet short-term obligations, and a low value may suggest difficulties in covering these liabilities. Nonetheless, the company's earnings yield of 3.98% offers a return on investment for shareholders, highlighting its profitability.
Royal Caribbean Tops Q2 Earnings Expectations, Raises Full-Year Guidance, But Shares Fall
Royal Caribbean (NYSE:RCL) announced its second-quarter results on Thursday, exceeding analyst expectations with an adjusted EPS of $3.21, higher than the Street estimate of $2.75.
The cruise line operator reported revenue of $4.1 billion, surpassing the consensus estimate of $4.04 billion. Despite the earnings beat, Royal Caribbean shares fell by 2% in pre-market today.
The company credited its strong performance to robust pricing on close-in demand and onboard revenue, as well as favorable expense timing. Year-over-year, Royal Caribbean's net income surged to $854 million, or $3.11 per share, from $459 million, or $1.70 per share, in the second quarter of the previous year.
Adjusted net income also increased to $882 million, or $3.21 per share, from $492 million, or $1.82 per share, year-over-year. President and CEO Jason Liberty emphasized the exceptional demand for Royal Caribbean's vacation experiences as a significant factor in the company's accelerated performance and substantial yield growth over the past several years.
Looking ahead, Royal Caribbean raised its full-year 2024 adjusted EPS guidance to a range of $11.35 to $11.45, reflecting a 68% year-over-year growth and surpassing the Street estimate of $11.08.
This optimistic outlook is supported by the company's record bookings and strong consumer spending onboard and through pre-cruise purchases.
For the third quarter of 2024, Royal Caribbean anticipates an adjusted EPS between $4.90 and $5.00. Net yields are expected to increase by 6.5% to 7.0%, and net cruise costs, excluding fuel per available passenger cruise days, are projected to rise by 4.7% to 5.2%.
Royal Caribbean Tops Q2 Earnings Expectations, Raises Full-Year Guidance, But Shares Fall
Royal Caribbean (NYSE:RCL) announced its second-quarter results on Thursday, exceeding analyst expectations with an adjusted EPS of $3.21, higher than the Street estimate of $2.75.
The cruise line operator reported revenue of $4.1 billion, surpassing the consensus estimate of $4.04 billion. Despite the earnings beat, Royal Caribbean shares fell by 2% in pre-market today.
The company credited its strong performance to robust pricing on close-in demand and onboard revenue, as well as favorable expense timing. Year-over-year, Royal Caribbean's net income surged to $854 million, or $3.11 per share, from $459 million, or $1.70 per share, in the second quarter of the previous year.
Adjusted net income also increased to $882 million, or $3.21 per share, from $492 million, or $1.82 per share, year-over-year. President and CEO Jason Liberty emphasized the exceptional demand for Royal Caribbean's vacation experiences as a significant factor in the company's accelerated performance and substantial yield growth over the past several years.
Looking ahead, Royal Caribbean raised its full-year 2024 adjusted EPS guidance to a range of $11.35 to $11.45, reflecting a 68% year-over-year growth and surpassing the Street estimate of $11.08.
This optimistic outlook is supported by the company's record bookings and strong consumer spending onboard and through pre-cruise purchases.
For the third quarter of 2024, Royal Caribbean anticipates an adjusted EPS between $4.90 and $5.00. Net yields are expected to increase by 6.5% to 7.0%, and net cruise costs, excluding fuel per available passenger cruise days, are projected to rise by 4.7% to 5.2%.
Royal Caribbean Price Target Raised by Wells Fargo: A Deep Dive into the Optimistic Outlook
- Wells Fargo increases Royal Caribbean's price target to $165, indicating a 15.5% potential upside.
- Royal Caribbean boasts an average brokerage recommendation (ABR) of 1.39, leaning towards a Strong Buy.
- The company's shares have surged by 90% over the past year, with a record-high adjusted EPS forecast for 2024.
Daniel Politzer of Wells Fargo has recently updated the price target for NYSE:RCL, Royal Caribbean, to $165, which is a 15.5% increase from its current trading price of $142.86. This adjustment, reported on May 17, 2024, by TheFly, reflects a growing confidence in the cruise operator's financial health and market performance. Royal Caribbean, known for its luxury cruise services, has been navigating through the competitive waters of the travel and leisure industry, facing off against rivals with its innovative offerings and global presence.
The optimism from Wells Fargo aligns with the broader sentiment among Wall Street analysts. With an average brokerage recommendation (ABR) of 1.39, indicating a position between Strong Buy and Buy, Royal Caribbean enjoys a favorable outlook from the investment community. This rating, derived from the assessments of 18 brokerage firms, showcases a strong vote of confidence, with 14 analysts recommending a Strong Buy and one advocating for a Buy. This consensus underscores the analysts' belief in Royal Caribbean's potential for growth and positive stock movement.
Supporting this positive outlook is Royal Caribbean's impressive financial performance. The company's shares have surged by 90% over the past year, propelled by better-than-expected financial results for the first quarter of 2024 and a promising forecast for the remainder of the year. On April 25, Royal Caribbean raised its full-year adjusted earnings per share (EPS) projection to between $10.70 and $10.90, up from earlier estimates. This adjustment points to a record-high adjusted EPS for 2024, signaling a significant turnaround and robust future for the company.
The cruise operator's success can be attributed to its ships operating at full capacity, with passengers spending more onboard, thus enhancing profitability. Additionally, Royal Caribbean has effectively managed its substantial debt, even lowering the interest rate on some of its obligations. These strategic financial maneuvers, coupled with strong operational performance, are key drivers behind the optimistic earnings forecast.
As Royal Caribbean's stock reached its highest price for the year at $144.339, up significantly from its year-low of $76.31, the company's market capitalization has grown to approximately $36.76 billion. With a trading volume of about 2.54 million shares, the company's financial health and strategic positioning suggest a compelling investment opportunity, as indicated by the recent price target adjustment and the strong confidence from analysts and investors alike.
