RCL Q3 2024 Earnings

Call Details

• Call Title: Royal Caribbean Cruises Q3 2024 Earnings Call
• Date: October 29, 2024 at 2:00 PM UTC
• Management Team:
  • Blake Vanier (Vice President of Investor Relations)
  • Jason Liberty (Chief Executive Officer)
  • Naftali Holtz (Chief Financial Officer)
  • Michael Bayley (President and CEO of Royal Caribbean International)

Call Summary

Financial Performance

• Adjusted earnings per share for Q3 were $5.20, which exceeded the midpoint of guidance by $0.25 per share.
• Net yield growth for Q3 was 7.9% year-over-year, which was 110 basis points above prior guidance.
• Adjusted EBITDA for the quarter was $2.1B, representing 24% year-over-year growth, and adjusted EBITDA margin was 44%, up 240 basis points versus last year.
• Net cruise costs excluding fuel increased 4% in constant currency for Q3.
• Approximately $0.10 per share of the Q3 EPS outperformance was attributed to favorable timing of expenses and additional benefits from balance sheet actions.
• The company expects to deliver more than $3.3B of cash flow for the full year 2024.

Guidance

• Full-year net yield guidance was raised to a range of 10.8% to 11.3%.
• Fourth quarter net yields are expected to be up 5.1% to 5.6%, which includes approximately a 40 basis point impact from Hurricane Milton.
• Full-year net cruise costs excluding fuel are expected to increase 6.2% to 6.7%, which is 40 basis points higher than prior guidance and is attributed entirely to higher non-cash stock-based compensation.
• Full-year fuel expense is expected to be $1.16B, and the company is 61% hedged at below market rates.
• Fourth quarter net cruise costs excluding fuel are expected to be up 11.6% to 12.1% driven predominantly by elevated dry dock days, higher non-cash stock compensation, and cost shifting from Q3.
• Fourth quarter adjusted EPS guidance is $1.40 to $1.45 and includes a $0.14 EPS impact from Hurricane Milton as well as higher stock-based compensation and about $0.10 of cost shifting from Q3.
• 2025 is preliminarily expected to start with a $14 handle for adjusted EPS and capacity growth is planned to be about 5% year-over-year.