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.
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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.
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.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
