Royal Caribbean Earnings: When Bad Is Actually Good for Investors
Royal Caribbean Cruises reported mixed quarterly results before the markets opened on Monday, but shares traded higher.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
When Royal Caribbean Cruises Ltd. (NYSE: RCL | RCL Price Prediction) reported its most recent quarterly results before the markets opened on Monday, the cruise line operator said that it had a net loss of $6.13 on $175.61 million in revenue in the second quarter. Consensus estimates had called for a $4.82 net loss per share and $43.5 million in revenue. The same period of year reportedly had $2.54 in EPS and $2.81 billion in revenue.
For comparison, the company posted $107.02 million in passenger ticket revenues and $68.58 million in onboard and other revenues. The same period of last year saw $2.02 billion in passenger ticket revenues and $788.80 million in onboard and other revenues.
Royal Caribbean has suffered from a lack of bookings due to the coronavirus pandemic. At the end of the quarter, the firm had $1.8 billion in customer deposits, of which about $300 million were related to fourth-quarter sailings. Nearly 48% of the guests booked on canceled sailings have requested cash refunds.
As it stands, the firm estimates its cash burn to be in the range of about $250 million to $290 million per month on average during this prolonged suspension of operations. This range includes all interest expenses, including the increases driven by the latest capital raises.
[nativounit]
On the books, cash and cash equivalents totaled $4.15 billion at the end of the quarter, up from $243.74 million at the end of the previous year.
The company issued no guidance for the third quarter. However, analysts are calling for a net loss of $4.65 per share and $194.83 million in revenue for the quarter.
Royal Caribbean stock traded up about 9% at $56.91, in a 52-week range of $19.25 to $135.32. The consensus price target is $60.00.
[recirclink id=728002][wallst_email_signup]
Contact [email protected] for any questions or corrections.
Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
