Royal Caribbean lifts annual profit target again on steady cruise vacation demand
Cruise line shares have risen around 66% this year
Royal Caribbean passengers rush to shelter as heavy winds, rain slam ship
Passengers on a Royal Caribbean cruise ship were slammed with a freak storm ahead of their departure, forcing them to rush for cover as deck furniture was blown into the air. (Jenn Stancil)
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.
Royal Caribbean
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.
SAM BANKMAN-FRIED WILL TAKE THE STAND IN FTX TRIAL: HERE ARE THE STAKES
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.
Royal Caribbean (Joe Raedle/Getty Images / Getty Images)
The cruise company said occupancy in the third quarter was 109.7%, up from 105% reported in the second quarter.
RENT CONTROL LAWS COULD BE CONTRIBUTING TO SHORTAGE OF AFFORDABLE HOUSING
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.
Airbnb, Booking.com will benefit from surge in travel demand: Mark Mahaney
Evercore ISI senior managing director Mark Mahaney analyzes three rising travel stocks on 'Varney & Co.'
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.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NCLH | NORWEGIAN CRUISE LINE HOLDINGS LTD. | 28.31 | +1.42 | +5.26% |
| CCL | CARNIVAL CORP. | 25.99 | +0.56 | +2.20% |
Royal Caribbean's quarterly total revenue rose 39% to $4.16 billion, compared with estimates of $4.08 billion, according to LSEG data.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
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.