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Investing.com -- Royal Caribbean Group (NYSE: RCL) reported its third-quarter results on Tuesday, with adjusted earnings per share of $5.75 exceeding analyst estimates of $5.69, but falling short on revenue, which came in at $5.14 billion versus expectations of $5.17 billion.
The cruise operator’s shares tumbled more than 8% following the earnings release as investors reacted to the revenue miss despite raised full-year guidance.
The company delivered vacations to 2.5 million guests during the quarter, a 7% increase YoY, with load factors reaching 112%, up one percentage point from the prior year. Net yields increased 2.8% as-reported (2.4% in Constant Currency), driven by both ticket pricing and onboard spending across the portfolio.
Royal Caribbean raised its full-year 2025 adjusted EPS guidance to a range of $15.58 to $15.63, representing 32% YoY growth, but slightly below the analyst consensus of $15.69. The company cited "higher than expected close-in demand and lower costs" as primary drivers for its better-than-expected quarterly performance.
"We continue to see strong momentum across our business, powered by accelerated demand, growing loyalty, and guest satisfaction that is at all-time highs," said Royal Caribbean Group President and CEO Jason Liberty. "Looking ahead, while it’s still early in the planning process, our strong booked position gives us confidence for 2026 and beyond."
The company also announced plans for a new exclusive destination, Royal Beach Club Santorini, set to open in summer 2026, expanding its land-based destination portfolio from two to eight by 2028.
For the fourth quarter, Royal Caribbean expects net yields to increase 2.6% to 3.1% as-reported, with adjusted EPS projected between $2.74 and $2.79. The company noted minimal impact in the fourth quarter from recent adverse weather and the extended temporary closure of its Labadee, Haiti destination.
"There will be panic/concern around RCL’s 4Q25 guide and ’initial’ 2026 guide," said Stifel analyst Steven Wieczynsk. However, the analyst believes there "are a lot of positive things" that can be pulled out of this release, including booking commentary, demand for 2026, the company’s customer deposit balance, onboard trends and RCL increasing the midpoint of their 2025 EPS range from $15.48 to $15.61.