Shares of Royal Caribbean Group (RCL, -0.73%) surged 8.0% in premarket trading on Thursday, reaching a more than three-year high. The cruise operator exceeded second-quarter profit and revenue expectations and provided a significant boost to its full-year outlook. Strong pricing and onboard revenue contributed to the impressive results.
Stellar Financial Performance
The company reported a net income of $458.8 million, or $1.70 per share, a remarkable improvement from the loss of $521.6 million, or $2.05 per share, in the same period last year. Adjusted earnings per share stood at $1.82, surpassing the FactSet consensus of $1.57, after excluding nonrecurring items.
Furthermore, Royal Caribbean Group experienced a substantial revenue growth of 61.3%, amounting to $3.52 billion. This exceeded the FactSet consensus of $3.41 billion. Notably, onboard revenue witnessed an astounding increase of 40.9% to $1.08 billion, while passenger ticket revenue rose by 72.3% to $2.44 billion.
Strong Future Outlook
The company’s bookings continue to surpass pre-COVID 2019 levels and achieve record pricing. As a result, Royal Caribbean Group has raised its guidance ranges for adjusted earnings per share for 2023 to $6.00-$6.20 from $4.40-$4.80. Additionally, the company expects net yields compared to 2019 to grow between 11.5% and 12.0%, a significant increase from the previous range of 6.25%-7.25%.
Impressive Market Performance
Year to date, Royal Caribbean Group’s stock has surged by an astonishing 104.1%. In contrast, the S&P 500 index (SPX, -0.02%) has advanced 18.9% during the same period.
As Royal Caribbean Group continues to outperform expectations and demonstrate resilience in the face of a challenging operating environment, investors and industry analysts remain optimistic about its future prospects.
