Royal Caribbean Cruises Ltd. (RCL) reported impressive third-quarter 2024 results, with earnings and revenues beating expectations. The strong performance was driven by accelerated demand and higher pricing on all key itineraries, coupled with continued strength in onboard revenue.
Revenue grew 17.5% year-over-year to $4.89 billion, driven by an 18% increase in passenger ticket revenues to $3.47 billion and a 16.1% rise in onboard and other revenues to $1.42 billion. Adjusted earnings per share of $5.20 surpassed the consensus estimate of $5.03.
Key highlights from the quarter:
- Net yields increased 7.9% year-over-year in constant currency, exceeding guidance due to higher pricing and onboard spending.
- Load factor reached 111%, reflecting stronger close-in demand.
- Consumer spending onboard and pre-cruise purchases significantly exceeded 2023 levels, driven by higher participation at higher prices.
Buoyed by the strong results, Royal Caribbean raised its full-year 2024 adjusted earnings per share guidance to a range of $11.57 to $11.62, up from its previous forecast of $11.35 to $11.45. The company now expects net yields to increase 10.8% to 11.3% in constant currency for the full year.
For the fourth quarter, Royal Caribbean expects net yield growth of 5.1% to 5.6% in constant currency, despite an approximately 40 basis point impact from Hurricane Milton. Adjusted earnings per share for the quarter are projected to be $1.40 to $1.45.
Looking ahead to 2025, while still early in the planning process, Royal Caribbean anticipates earnings per share "to start with a $14 handle," surpassing the current consensus estimate of $13.68. The company cited elevated demand patterns continuing and its "proven formula of moderate capacity growth, moderate yield growth, and strong cost discipline" as key drivers for the positive outlook.
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