Royal Caribbean Beats Third-Quarter Forecasts, Raises Full-Year Guidance

Royal Caribbean Group reported third-quarter 2026 results above its own guidance, with earnings per share of $6.45 and adjusted earnings per share of $6.57. The company attributed the performance to stronger-than-expected close-in demand and lower costs due to timing issues, and as a result raised its full-year 2026 adjusted earnings per share guidance to a range of $17.85 to $17.95.

Total revenue for the quarter reached $5.6 billion, a 9% year-over-year increase, with a load factor of 112%. Net Yields rose 0.9% as reported and 0.6% in Constant Currency, driven by better-than-expected demand in Europe and the Caribbean, while Net Cruise Costs excluding fuel per APCD fell 1.9% as reported due to the shift of expenses into the fourth quarter. Net income came in at $1.7 billion, compared to $1.6 billion in the same period last year, and Adjusted EBITDA reached $2.5 billion. According to sea-trade cruise, these figures beat Wall Street's forecast of $6.38 and the company's July guidance of $6.26 to $6.36 per share.

In September, Royal Caribbean Group had announced a deal to acquire a 50% stake in Sandals and Beaches Resorts, with a portfolio of 18 resorts across the Caribbean and three under development, along with more than 1,000 acres of undeveloped land in the region. The deal aims to preserve the brands' identity, operating leadership and Caribbean character, while pooling resources and capabilities to generate value. The company noted that around 30% of its guests also take all-inclusive vacations, and a similar percentage of Sandals and Beaches customers also go on cruises. The investment is expected to close in early 2027, subject to customary conditions and regulatory approvals, and will be accounted for under the equity method with a one-quarter lag.

Since the last earnings release, booking volumes have grown in the mid-double digits across all key channels, with bookings for 2027 sailings up in the high-double digits. CEO Jason Liberty noted that 2027 marks the final year of the Perfecta program's target period, and that the business continues to outperform initial expectations, keeping the company on track to meet its goal of a 20% compound annual growth rate in adjusted earnings per share between 2024 and 2027, while already exceeding its return on invested capital target.

For the fourth quarter, the company expects adjusted earnings per share in a range of $3.48 to $3.58, a figure that, according to sea-trade cruise, falls short of the consensus of $3.66. Net Yields are projected between 4.4% and 4.9% as reported, driven by strong demand, a more favorable year-over-year comparison, itinerary deployment mix and the dry dock schedule, with total revenue growth expected at 9%.