Q3 2024 Royal Caribbean Cruises Ltd Earnings Call Transcript
Key Points
- Royal Caribbean Group (RCL) reported exceptional third-quarter results, exceeding expectations with strong close-in demand and higher prices across key itineraries.
- The company increased its full-year yield and earnings guidance, with full-year yield expected to rise by more than 11% and earnings by over 70%.
- RCL is on track to deliver more than $3.3 billion in cash flow this year and has returned to a fully unsecured capital structure, supporting growth ambitions.
- The company announced exciting expansions in its private destinations portfolio, including Perfect Day Mexico and a new hotel in Puerto Williams, Chile.
- RCL's strategic focus on moderate capacity growth, moderate yield growth, and strong cost control continues to drive top-line growth and margin expansion.
- Hurricane Milton impacted fourth-quarter yield growth expectations, causing a 40 basis point reduction.
- Net cruise costs, excluding fuel, are expected to rise by 6.2% to 6.7% for the full year, driven by higher non-cash stock-based compensation.
- The fourth quarter will see an increase in costs due to elevated drydock days and shifting of expenses from the third quarter.
- Despite strong demand, the company faces challenges in managing cost pressures associated with ongoing investments in new ships and private destinations.
- RCL's guidance for 2025 remains cautious, with moderate yield growth expected, reflecting the high bar set by previous years' unprecedented yield growth.
Good morning.
My name is Regina, and I will be your conference operator today.
At this time, I would like to welcome everyone to Royal Caribbean Group Q3 2024 earnings call.
(Operator Instructions)
I would now like to introduce Ian Bailey, Vice President of Investor Relations.
Mr. Bailey, the floor is yours.
Good morning, everyone, and thank you for joining us today for our third quarter 2024 earnings call.
Joining me here in Miami, Jason Liberty; Chief Executive Officer, Naftali Holtz our Chief Financial Officer, and Michael Bayley, President and CEO of Royal Caribbean International.
Before we get started, I'd like to note that we will be making forward-looking statements during this call. These statements are based on management's current expectation stations and are subject to risks and uncertainties.
A number of factors could cause actual results to differ materially from our current expectations.
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