Shares of Royal Caribbean (NYSE:RCL) surged 4.8% following the announcement of their first-quarter earnings, which exceeded analysts' expectations. The cruise operator reported an adjusted EPS of $1.77, surpassing the consensus estimate of $1.32. Revenue for the quarter was also higher than anticipated, coming in at $3.7 billion against the expected $3.69 billion.
The company attributed the strong performance to robust demand and higher onboard spending, which led to a notable increase in revenue and earnings compared to the same quarter last year. The positive results have prompted Royal Caribbean to raise its full-year 2024 adjusted EPS guidance to a range of $10.70 to $10.90, well above the consensus of $10.06.
President and CEO Jason Liberty expressed enthusiasm about the quarter's results, "Demand for our leading brands and the incredible experiences they deliver continues to be very robust, resulting in outperformance in the first quarter, a further increase of full year earnings guidance, and 60% expected earnings growth year over year," he said.
In terms of operational metrics, the first quarter saw a load factor of 107%, with gross margin yields up by 60.3% as-reported. Net yields also saw an increase of 19.3% in constant currency compared to the same period last year. The company's net income stood at $360 million, a significant turnaround from the net loss of $48 million reported in the first quarter of the previous year.
Looking ahead, Royal Caribbean expects net yields to increase between 9.0% to 10.0% in constant currency for the full year 2024. Adjusted EPS is projected to grow by 60% YoY, with the company on track to achieve its Trifecta financial goals one year ahead of schedule.
The company's booking momentum continues to be strong, with the WAVE season setting new records in both demand and pricing. Royal Caribbean is in a record booked position for 2024, with rates further ahead than at the beginning of the year. Onboard spending and pre-cruise purchases have also exceeded previous years, contributing to the upbeat forecast.
As for the second quarter of 2024, net yields are expected to increase between 10.20% to 10.70% in constant currency. Adjusted EPS for the quarter is forecasted to be in the range of $2.65 to $2.75, reflecting the company's confidence in continued strong performance.
The robust financial results and optimistic guidance have clearly resonated with investors, as evidenced by the stock's positive movement. With the cruise industry showing signs of a strong recovery, Royal Caribbean's strategic initiatives seem to be positioning the company for sustained growth in the global vacation market.