Why Royal Caribbean Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Royal Caribbean Cruises (NYSE: RCL  ) were headed for the top deck today, gaining as much as 12% on strong guidance in its quarterly earnings report.

So what: Profits and revenues slipped from a year ago, but still beat estimates. The cruise line reported EPS of $1.68 per share, well ahead of the $1.46 consensus estimate, and revenue of $2.23 billion, slightly ahead of expectations. Bookings were stronger than expected, both in North America and Europe, and the industry seems to finally have rebounded from the Costa Concordia disaster in January. Management lifted its full-year guidance $0.15 cents to $1.85 to $1.95/share, as the third quarter is by far the strongest, and expressed optimism about 2013.

Now what: Shares of Royal Caribbean are now at their highest level since July 2011, and could continue to climb as the global economy recovers. This industry is notoriously hard to predict, because it swings with the business cycle, seasonality, and natural disasters, such as weather and the shipwreck we saw earlier. Demographic trends, like the retiring baby boomer generation, seem to favor it, however, which is one reason why Royal Caribbean could continue to surprise.

Don't let Royal Caribbean drift away from you. Add the company to your Watchlist by clicking here.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2077269, ~/Articles/ArticleHandler.aspx, 4/18/2014 7:58:03 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...