Royal Caribbean (RCL) Q2 Earnings Lag Estimates, Revenues Top
Royal Caribbean Cruises Ltd. RCL reported second-quarter 2020 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same. While the top line beat the consensus mark after missing in the preceding three quarters, the bottom line missed the same for the second straight quarter. Moreover, both the metrics declined sharply year over year due to the coronavirus pandemic.
The company reported adjusted loss per share of $6.13, wider than the Zacks Consensus Estimate of a loss of $4.71. In the prior-year quarter, the company had reported adjusted earnings per share of $2.54 per share.
Total revenues were $175.6 million, beating the consensus mark of $52 million. However, the figure declined 93.7% from the year-ago quarter. Due to the pandemic, the company suspended its global cruise operation beginning Mar 13, 2020, which resulted in the cancellation of all of the company's second-quarter sailings.
During suspension of operations, the company anticipates cash burn in the range of nearly $250 million to $290 million per month.
Royal Caribbean Cruises Ltd. Price, Consensus and EPS Surprise
Royal Caribbean Cruises Ltd. price-consensus-eps-surprise-chart | Royal Caribbean Cruises Ltd. Quote
Quarterly Highlights
Passenger ticket revenues decreased 94.7% to $107 million, while onboard and other revenues declined 91.3% to $68.6 million.
Total cruise operating expenses were $680.4 million, compared with $1,544.5 million at the end of second-quarter 2020.
Other Financial Information
As of Jun 30, 2020, the company had cash and cash equivalents of approximately $4.1 billion.
The company announced that as of Jun 30, 2020, the anticipated debt maturities for the remainder of 2020 and 2021 are $0.3 billion and $1.3 billion, respectively.
Capital expenditure for remainder of 2020 and 2021 are anticipated to $0.6 billion and $1.8 billion, respectively.
Guidance
Due to the pandemic, the company has withdrawn guidance. The company is unable to estimate the financial losses owing to the coronavirus as the magnitude and duration of the same remains uncertain.
The company announced interest expenses for the remainder of the year (Jul 1, 2020 through Dec 31, 2020) in the range of $505-$515 million.
The pandemic have significantly impacted the bookings for remainder of 2020. However, bookings for 2021 is trending well and is within historical ranges.
Zacks Rank & Stocks to Consider
Royal Caribbean, which shares space with Carnival Corporation & Plc CCL and Norwegian Cruise Line Holdings Ltd. NCLH, has a Zacks Rank #4 (Sell). A better-ranked stock worth considering in the same space includes Camping World Holdings, Inc. CWH, carrying a Zacks Rank #2 (Buy). Camping World Holdings current-year earnings are likely to witness growth of 327.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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