Royal Caribbean lifts annual profit target again on robust cruise vacation demand
By Granth Vanaik
(Reuters) -Royal Caribbean Group lifted its full-year profit forecast for a third time on Thursday, backed by elevated ticket prices as well as steady demand from customers for leisure travel, sending its shares up 2%.
Cruise operators are now reaping the rewards as travelers gravitate to cruise vacations that offer a range of fun activities under one roof and are cheaper compared to taking a land-based holiday.
This has given them the ability to further hike itinerary prices, especially in North America and Europe, as occupancy levels now approach pre-pandemic levels.
The cruise company said occupancy in the third quarter was 109.7%, up from 105% reported in the second quarter.
Royal Caribbean (NYSE:RCL) expects annual adjusted profit between $6.58 and $6.63 per share, compared with earlier forecast of $6.00 to $6.20.
The cruise company also said demand for 2024 has continued to accelerate, with bookings «significantly outpacing» 2019 levels.
«We cannot find anything to pick at in this report, and believe this is much better than expected,» said Barclays analyst Brandt Montour.
However, the company said its full-year earnings per share would take an 18-cent hit from higher fuel prices and a stronger dollar.
The company also said the ongoing military conflict in the Middle East is expected to hit its annual profit by 3 cents.
Peer Carnival (NYSE:CCL) in September narrowed its annual loss forecast and posted a third-quarter profit after reporting a loss a year earlier, but investors showed deep concerns around steeper fuel costs.
Rival Norwegian Cruise Line (NYSE:NCLH) reports third-quarter results on Nov. 1.
Royal Caribbean also expects fourth-quarter adjusted profit between $1.05 and $1.10 per share,
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