By Freddy Sebastian
Royal Caribbean said demand remained strong as it reported higher first-quarter profit and revenue but cut its forecast for the year, citing higher fuel costs and the impact from the war in Iran.
The company is now projected adjusted earnings of $17.10 to $17.50 a share for 2026 compared with its previous guidance of $17.70 to $18.10 that it provided last quarter. Analysts polled by FactSet currently expects adjusted earnings of $17.09 a share.
For the full year, Royal Caribbean said it expects fuel expense to be about $1.3 billion, or 62 cents a share higher than prior guidance, based on current at-the-pump prices, net of hedging impacts. The company noted fuel expense would be about 4% lower if rates were based on the forward curve.
For the current quarter, the cruise operator expects adjusted earnings of $3.83 to $3.93 a share, below analysts' estimates of $4.02 a share. It included $346 million of fuel expense in its quarterly guidance at a forecasted consumption of 423,000 metric tons, which is 60% hedged via swaps.
Bookings had moderated in March and early April for the Mediterranean and west coast of Mexico itineraries due to the geopolitical developments but have recovered and are currently running at a higher pace than the same time last year, the company said Thursday.
"We expect another year of double-digit revenue and earnings growth, driven by consumers' preference for our leading brands and expanding portfolio -- all supported by our strong booked position, leading margin profile, and fortified balance sheet," Chairman and Chief Executive Jason Liberty said.
Shares were recently up 6.3% at $270.30.
Royal Caribbean posted net income of $941 million, or $3.48 a share, up from $730 million, or $2.70 a share, in the year prior.
Adjusted earnings were $3.60 a share, compared with analysts' expectations of $3.20 a share, according to FactSet.
Total revenue rose 11% to $4.45 billion from $3.99 billion. Wall Street modeled for $4.46 billion in revenue for the latest period.
The cruise industry has faced some potential setbacks this year as the conflict in the Middle East led global oil prices to soar, raising costs for Royal Caribbean, Carnival and Norwegian Cruise Lines. Analysts have said consumers grappling with higher gas prices have been less likely to spend on cruise travel.
Write to Freddy Sebastian at freddy.sebastian@wsj.com
(END) Dow Jones Newswires
April 30, 2026 10:19 ET (14:19 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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