What happened

Shares of Royal Caribbean Cruises (NYSE:RCL) jumped as much as 7.5% in trading Wednesday after the company announced first-quarter results and full-year guidance. At 1:40 p.m. EDT, shares were at their daily high and show no sign of slowing down.

So what

Quarterly revenue was up 20.3% to $2.44 billion, and net income dropped from $213.6 million to $209.9 million, or $1.19 per share. Revenue easily topped the $2.37 billion estimate from Wall Street, and adjusted earnings of $1.31 beat estimates of $1.11.

Cruise ship at a dock.

Image source: Getty Images.

What really got investors excited was full-year earnings guidance of $9.65 to $9.85 per share. That's lower than the $9.75 to $10.00 given in January, but it includes a negative $0.25 impact from an incident at the Grand Bahama Shipyard and a negative $0.25 adjustment for higher oil prices. Without those two items, guidance would have been up significantly.

Now what

Management has said that demand is higher than they expected, and that's what's driving strong results. In the case of cruise lines, a strong economy and rising wages are leaving more money to spend on vacations. As long as that trend continues, operations will improve. With shares trading at just over 13 times the high end of forward estimates, the stock still has value for investors.