Royal Caribbean Soars After Boosting Full Year Profit Forecast
Royal Caribbean Cruises Ltd. (RCL) shares surged after the company raised its full-year profit forecast, citing strong bookings and higher ticket prices. The cruise operator said it now expects to earn between $6.50 and $7.50 per share in 2023, up from its previous forecast of $5.50 to $6.50.
RCL’s Positive Outlook
The news sent RCL shares up more than 8% in premarket trading. The company said it expects to benefit from strong demand for cruises, with bookings for the second half of 2023 up more than 20% compared to the same period last year.
RCL also said it expects to benefit from higher ticket prices, as well as cost savings from its new fuel-efficient ships. The company said it expects to save $200 million in fuel costs in 2023, compared to last year.
RCL’s Financial Performance
RCL reported a net loss of $1.3 billion in the first quarter of 2023, compared to a net loss of $1.2 billion in the same period last year. Revenue fell to $1.7 billion, down from $2.2 billion in the first quarter of 2022.
The company said it expects to report a net loss of between $1.5 billion and $2.0 billion for the full year. However, it said it expects to generate positive cash flow of between $1.0 billion and $1.5 billion.
RCL’s Expansion Plans
RCL is also expanding its fleet, with plans to add four new ships in 2023. The company said it expects to launch its first new ship, the Symphony of the Seas, in the fourth quarter of 2023.
The company said it expects the new ships to generate additional revenue of between $500 million and $1 billion in 2023. It also said it expects the new ships to help reduce costs, as they will be more fuel-efficient than its existing fleet.
RCL’s Outlook for 2023
RCL said it expects to benefit from strong demand for cruises in 2023, as well as higher ticket prices and cost savings from its new fuel-efficient ships. The company said it expects to generate positive cash flow of between $1.0 billion and $1.5 billion, and to earn between $6.50 and $7.50 per share.
The company also said it expects to launch its first new ship, the Symphony of the Seas, in the fourth quarter of 2023. It said it expects the new ships to generate additional revenue of between $500 million and $1 billion in 2023, and to help reduce costs.
RCL’s Response to the Pandemic
RCL has been hit hard by the pandemic, with its revenue falling by more than 50% in 2020. The company has responded by cutting costs and suspending its dividend. It has also implemented a number of safety protocols, including mandatory testing for all passengers and crew members.
The company said it expects to benefit from the easing of travel restrictions and the rollout of vaccines. It said it expects to resume sailing in the second half of 2023, with bookings for the second half of the year up more than 20% compared to the same period last year.
RCL’s Stock Performance
RCL’s stock has been on a roller coaster ride in recent months, with the shares falling to a low of $20 in April before rebounding to a high of $60 in June. The stock has since pulled back to around $50, but the company’s positive outlook has sent the shares higher in premarket trading.
RCL’s Future Prospects
RCL is well-positioned to benefit from the recovery in the cruise industry. The company has a strong balance sheet, with more than $3 billion in cash and no debt. It also has a strong portfolio of new ships, which will help it capitalize on the expected rebound in demand.
The company is also taking steps to reduce costs and improve efficiency. It has implemented a number of cost-saving measures, including the suspension of its dividend and the sale of non-core assets.
RCL is also investing in new technology, such as artificial intelligence and virtual reality, to improve the customer experience. The company said it expects these investments to help it capitalize on the expected rebound in demand.
Overall, RCL is well-positioned to benefit from the recovery in the cruise industry. The company has a strong balance sheet, a strong portfolio of new ships, and is taking steps to reduce costs and improve efficiency. It is also investing in new technology to improve the customer experience. With strong bookings and higher ticket prices, the company is well-positioned to benefit from the expected rebound in demand.