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Royal Caribbean Cruises Ltd. RCL reported mixed third-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
Post the results, the cruise stock declined 8.7% in the pre-market trading session. The negative reaction came despite stronger-than-expected quarterly earnings, as investors turned cautious on the company’s near-term outlook and capital spending plans.
Although management raised full-year EPS guidance, comments regarding adverse weather impacts, the extended closure of Labadee and moderate yield growth expectations signaled potential softness in the fourth quarter and a possible normalization of pricing trends. Additionally, plans for increased capital investment in new destinations and technology may have raised concerns about future cash flow and debt reduction, thereby likely triggering profit-booking.
For the third quarter, the company reported adjusted earnings per share (EPS) of $5.75, which beat the Zacks Consensus Estimate of $5.68. In the prior-year quarter, RCL recorded an adjusted EPS of $5.20.
Royal Caribbean Cruises Ltd. price-consensus-eps-surprise-chart | Royal Caribbean Cruises Ltd. Quote
Quarterly revenues of $5.14 billion missed the consensus estimate of $5.17 billion. However, the reported value was up 5.2% year over year from $4.88 billion.
In the third quarter of 2025, Passenger ticket revenues amounted to $3.64 billion, up from $3.47 billion in the prior-year quarter. Our estimate for Passenger ticket revenues was $3.65 billion.
Onboard and other revenues increased to $1.5 billion from $1.41 billion reported in the year-ago quarter. Our estimate for the metric was $1.5 billion.
Total cruise operating expenses amounted to $2.48 billion, up 3.7% year over year. Our estimate for the metric was $2.35 billion.
Net yields rose 2.4% on a constant currency basis (cc) and 2.8% on a reported basis compared with the third-quarter 2024 level. Net cruise costs, excluding fuel, per Available Passenger Cruise Day (APCD) increased 4.8% on a reported basis and 4.3% at cc from last year's quarter figure.
As of Sept. 30, 2025, Royal Caribbean reported cash and cash equivalents of $432 million compared with $388 million in 2024-end. As of the end of the third quarter of 2025, long-term debt decreased to $17.2 billion from the $18.47 billion reported in 2024-end. The current portion of long-term debt at the end of the quarter was $3 billion, up from $1.6 billion recorded in 2024-end.
Royal Caribbean is witnessing strong booking momentum, with load factors for 2025 and 2026 tracking at record levels and within historical ranges. The company reported accelerated bookings across both new and existing ships, led by robust demand for close-in sailings. It noted that 2026 bookings are trending well above prior-year levels, reflecting rate growth at the high end of historical norms. Onboard spending and pre-cruise purchases remain well ahead of previous years, supported by greater guest engagement and higher pricing. During the third quarter, roughly half of onboard revenues were booked pre-cruise, with nearly 90% of those transactions made through digital channels.
Looking ahead, Royal Caribbean sees strong momentum across its portfolio as consumers continue to prioritize vacation experiences. Bookings for upcoming launches — including Star of the Seas and Celebrity Xcel — are demonstrating exceptional traction, while early demand for Royal Beach Club Paradise Island has been robust. The company also highlighted the overwhelming response to Celebrity River, whose initial deployment sold out almost immediately. These strategic additions underscore Royal Caribbean’s ongoing efforts to enhance guest experiences and expand its integrated vacation ecosystem.
For the fourth quarter of 2025, Royal Caribbean expects depreciation and amortization expenses to be in the range of $445-$455 million. Net interest expenses (excluding loss on extinguishment of debt) are projected to be between $245 million and $255 million. Management estimates adjusted EPS to be in the band of $2.74-$2.79.
The company expects net yields to increase in the band of 2.6-3.1% on a reported basis and 2.2-2.7% at cc year over year. Net cruise costs, excluding fuel, per APCD are expected to decline between 5.7% and 6.2% on a reported basis and in the range of 6.1-6.6% at cc.
For 2025, the company expects depreciation and amortization expenses to be in the range of $1.70-$1.71 billion. Net interest expenses (excluding loss on extinguishment of debt) are expected to be between $945 million and $955 million. Adjusted EPS is anticipated to be between $15.58 and $15.63 compared with the previous expectation of $15.41 and $15.55.
The company expects net yields to increase in the band of 3.5-4% both on a reported and cc basis, year over year.
Royal Caribbean currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Consumer Discretionary sector are Norwegian Cruise Line Holdings Ltd. NCLH, Carnival Corporation & plc CCL and Planet Fitness, Inc. PLNT.
Norwegian Cruise Line flaunts a Zacks Rank #1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 29.1%, on average. NCLH stock has declined 8.7% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NCLH’s 2025 sales and EPS indicates growth of 6% and 15.4%, respectively, from the year-ago period’s levels.
Carnival flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 169.8%, on average. Carnival stock has gained 18% year to date.
The Zacks Consensus Estimate for Carnival’s fiscal 2025 sales and EPS indicates growth of 6.5% and 51.4%, respectively, from the prior-year levels.
Planet Fitness has a Zacks Rank of 2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 6.8%, on average. Planet Fitness stock has gained 20.1% in the past year.
The Zacks Consensus Estimate for Planet Fitness’ 2025 sales and EPS indicates growth of 10.2% and 13.1%, respectively, from the prior-year levels.
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This article originally published on Zacks Investment Research (zacks.com).
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