Royal Caribbean cruises to a $1 billion quarter

Royal Caribbean president and CEO Jason Liberty: “Looking ahead, we see accelerating demand as we build the business for 2024. Our booked load factors are higher than all prior years and at higher rates."

Shares in Royal Caribbean Group (NYSE: RCL) were trading up today, as the company reported third quarter results that topped analysts’ expectations. The cruise giant reported net income for the third quarter of $1.0 billion or $3.65 per share compared to net Income of $33.0 million or $0.13 per share for the same period in the prior year. The company also reported adjusted net Income of $1.1 billion or $3.85 per share for the third quarter compared to adjusted net income of $65.8 million or $0.26 per share for the same period in the prior year.

Royal Caribbean said these results were better than its previous guidance due to stronger close-in demand and further strength in onboard revenue. The company is also increasing its full year 2023 adjusted EPS guidance to $6.58 – $6.63, driven by strong demand and continued strength in onboard revenue.

“The strength of our brands and the acceleration of consumer spending on experiences have propelled us towards another outstanding quarter and a robust 2023,” said president and CEO Jason Liberty, president and CEO. “Looking ahead, we see accelerating demand as we build the business for 2024. Our booked load factors are higher than all prior years and at higher rates, further supporting our trajectory towards the Trifecta goals.”

Those Trifecta goals were set back by the company back in November 2022, when it unveiled a three-year financial performance initiative setting three main goals to be achieved by the end of 2025:

• Triple Digit Adjusted EBITDA per APCD, to exceed prior record Adjusted EBITDA per APCD of $87 in 2019.
• Double Digit Adjusted Earnings per Share to exceed the prior record Adjusted Earnings per Share of $9.54 in 2019.
• Return on Invested Capital (“ROIC”) in the teens to exceed the prior record ROIC of 10.5% in 2019 through optimizing capital allocation and enhancing operating income.

…all while returning to an investment grade profile and reducing carbon intensity by double digits compared to 2019.

Today’s numbers had one analyst ask Liberty whether he thought those Trifecta goals could be beaten. You can read his answer in a transcript of today’s conference call available through Seeking Alpha that also gives some interesting insights into what’s at play in the cruise market today.

• Read the transcript HERE

• Read the full Royal Caribbean earnings release HERE