Royal Caribbean lifts annual profit target again on steady cruise vacation demand
Royal Caribbean Group lifted its full-year profit forecast for a third time on Thursday, banking on elevated ticket prices as well as steady demand from affluent customers for leisure travel.
Shares of the Miami, Florida-based company rose following the news.
After months of being hindered by pandemic-related restrictions, cruise operators are now reaping the rewards as travelers gravitate to cruises that offer a range of fun activities under one roof and are cheaper compared to taking a land-based holiday such as that to a theme park.
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This has given Royal Caribbean and its competitors the ability to further hike up 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.
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The company expects annual adjusted profit between $6.58 and $6.63 per share, compared with its earlier forecast of $6.00 to $6.20.
Peer Carnival in September narrowed its annual loss forecast and swung to a third-quarter profit, benefiting from bumped up ticket prices and robust demand, but investors showed deep concerns around steeper fuel costs.
Rival Norwegian Cruise Line will be reporting third-quarter earnings on Nov. 1. Shares of Norwegian Cruise Line and Carnival were up 1.2% and 2.8%, respectively, following Royal Caribbean's results.
Royal Caribbean's quarterly total revenue rose 39% to $4.16 billion, compared with estimates of $4.08 billion, according to LSEG data.
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The company also expects an adjusted profit between $1.05 and $1.10 per share in the fourth quarter, compared with analysts' expectations of $1 per share.