Royal Caribbean reports strong second quarter
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Royal Caribbean reports strong second quarter

Cruise line giant Royal Caribbean reported earnings last week that should have brightened investors’ days. The company managed to beat the Street on both revenue and earnings, demonstrating that demand remained high for its core travel product. That product has been the subject of continued investment and innovation over the past year. Royal Caribbean’s focus on the “experience” of cruising, replete with everything from at-sea adrenaline-fuelled activities to relaxing stays on private islands. Add to that Royal Caribbean’s increasingly eco-friendly reputation, and you have a company that’s primed to outcompete its rivals.

Royal Caribbean’s share price has appreciated by 19% year to date

Royal C July 30

Source: Yahoo Finance

On the top line, Royal Caribbean managed to deliver revenues of $2,806.6 million, beating the Street’s estimates of $2,794 million. That’s a 20.1% rise against the year-ago quarter, which can be put down in large part to more passengers travelling on the company’s ships and more spending onboard. The company also overshot analysts’ expectations on the bottom line. Royal Caribbean posted earnings per share of $2.54 against consensus estimates of $2.45. That’s a year on year rise of 11.9%.

Drawing inspiration from Charles Darwin, father of the modern scientific theory of evolution, chairman and CEO Richard Fain made the following comments about Royal Caribbean’s strategic values on the company’s earnings call:  

“We believe that to succeed in today's world, you need to adapt to an ever-changing environment. The ability to adapt is often called innovation, but innovation is really adapting to and/or leading change in a rapidly evolving world. I'm proud of the people at Royal Caribbean who continue to innovate and to adapt to that fast-changing world.

We continue to do well because we continue to adapt our product to the changing desires of our current and future guests and the changing environment which we operate. Innovation has been and is a central tenet of our ability to drive change and to respond to change.”

Disclosure

Dominion holds Royal Caribbean in its Global Trends Luxury Fund.


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