Royal Caribbean Reports Loss in Q3

The third quarter of 2021 saw Royal Caribbean International (RCL) perform poorly. The company reported an adjusted loss of $4.91 per share, much worse than the analysts’ expectations of $4.16 loss per share. However, the loss was lower than the adjusted loss of $5.62 per share in the same quarter last year.

Meanwhile, total revenues jumped to $457 million against negative revenues of $33.7 million in the same quarter last year, yet revenues failed to meet consensus estimates of $612.15 billion. (See Royal Caribbean stock charts on TipRanks)

Booking Update

The COVID-19 Delta variant led to a slowdown in bookings during the summer season, albeit the company said that it has worked diligently to restart its vessel operations. Consequently, there were higher bookings in the third quarter compared to the second quarter with two-thirds of the fleet currently operational.

Notably, in September, new bookings for 2022 sailings were 60% higher than the monthly average during the second quarter.

Chairman and CEO of RCL, Richard Fain, said, “We want to show, in a tangible way, the safety and simplicity of cruising. Our strategy continues to focus on getting the flywheel spinning smooth and fast, so that as we turn the year we will enjoy a stable and predictable platform with which to start the WAVE Period.”

Last month, the U.S. Centers for Disease Control and Prevention (CDC) issued a temporary extension on the Conditional Sail Order through January 15, 2022.

Fain stated, “This is a great example of how close collaboration between the cruise industry and the CDC results in health and safety protocols that have demonstrated cruising can be one of the safest forms of vacation.”

Following the results, Deutsche Bank analyst Chris Woronka reiterated a Hold rating with the price target of $81 (4.1% downside potential).

Currently, the Street holds a cautiously optimistic outlook on the stock, with a Moderate Buy analyst consensus based on 2 Buys and 3 Holds. The average Royal Caribbean price target of $95.75 implies 13.4% upside potential from current levels.