Royal Caribbean (RCL +1.04%) stock jumped a lucky 7.7% through 12:15 p.m. ET Thursday after beating on top and bottom lines in its Q1 earnings report this morning.
Heading into the report, analysts forecast the cruise line stock to earn $3.22 per share on sales of just under $4.5 billion. In fact, Royal Caribbean earned $3.60 per share -- and hit $4.5 billion in revenue on the nose.
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Royal Caribbean Q1 earnings
The news wasn't quite as good as that sounds. Royal Caribbean's "$3.60" profit was only a non-GAAP number for example -- its actual earnings calculated under generally accepted accounting principles (GAAP) were only $3.48 per share.
But even so, $3.48 represented a strong 29% year-over-year profit improvement, nearly three times Royal Caribbean's 11% sales improvement, and better than management had expected to earn.
And more improvements are coming.
NYSE: RCL
Key Data Points
What's next for Royal Caribbean stock
CEO Jason Liberty says investors can expect Royal Caribbean to keep on reporting "double-digit revenue and earnings growth" all year long, and is raising guidance to match.
Revenue is expected to grow roughly 10% year over year. The rising price of fuel as a result of the Iran War is still a concern, and may increase costs by $1.3 billion more than previously hoped. But even so, management anticipates earning between $17.10 and $17.50 per share through the end of the year.
Again, these are non-GAAP numbers, so GAAP earnings could be more modest. Still, we're probably looking at something on the order of a 16 current-year P/E on the stock. With revenue growing 10% or 11%, profits growing even faster, and a tidy 1.7% dividend yield to sweeten the deal, Royal Caribbean stock looks priced fairly to me.
