Royal Caribbean (RCL) Q2 Earnings: What To Expect

Cruise vacation company Royal Caribbean (NYSE:RCL) will be reporting earnings tomorrow before market open. Here’s what investors should know.

Royal Caribbean beat analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $3.73 billion, up 29.2% year on year. It was a strong quarter for the company, with optimistic earnings guidance for the next quarter and an impressive beat of analysts’ earnings estimates.

Is Royal Caribbean a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Royal Caribbean’s revenue to grow 14.8% year on year to $4.04 billion, slowing from the 61.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.75 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Royal Caribbean has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Royal Caribbean’s peers in the consumer discretionary segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Carnival delivered year-on-year revenue growth of 17.7%, beating analysts’ expectations by 1.9%, and Levi’s reported revenues up 7.8%, in line with consensus estimates. Carnival traded up 12% following the results while Levi’s was down 15.7%.

Read our full analysis of Carnival’s results here and Levi’s results here.

There has been positive sentiment among investors in the consumer discretionary segment, with share prices up 9.8% on average over the last month. Royal Caribbean is up 6.2% during the same time and is heading into earnings with an average analyst price target of $169.7 (compared to the current share price of $170.69).

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