Royal Caribbean Group (RCL) lowered its yield forecast and trimmed its revenue growth outlook, citing a modest hit to bookings from the ongoing Middle East conflict. Despite the cautious outlook, the company raised its annual adjusted profit forecast, and its shares rose 5% following the announcement.
The cruise operator now expects revenue growth of about 9%, down from an earlier forecast of roughly 10%. The company cited the Middle East conflict as a factor causing a modest impact on bookings. CEO Jason Liberty noted that travelers are either postponing trips to next year or opting for the Caribbean instead of Europe.
Q2 adjusted earnings per share, beating analyst estimates of $3.98
Second-quarter earnings per share reached $4.21 on an adjusted basis, exceeding Wall Street expectations of $3.98. Quarterly revenue rose 6% to $4.83 billion, also above the consensus estimate of $4.82 billion. However, fuel expenses surged 27% to $355 million year-over-year, though the full-year fuel expense forecast was trimmed to about $1.34 billion from $1.35 billion.
Looking ahead, Royal Caribbean raised its annual adjusted profit forecast to a range of $17.73 to $17.87 per share, up from the previous outlook of $17.10 to $17.50. Analyst Michael Gunther of Consumer Edge said the company could be relatively well positioned given the strength of its flagship brand and above-average exposure to higher-income consumers.