Key Highlights

  • Adjusted EPS was $6.57 against $5.75, up 14.3%, ahead of market estimates of $6.38 as screened.
  • Revenue rose 9% to $5,591 million, and adjusted EBITDA reached $2,539 million at a 45.4% margin.
  • Full-year 2026 adjusted EPS guidance is $17.85 to $17.95, and fourth-quarter guidance is $3.48 to $3.58.
  • Fourth-quarter net yields are guided up 4.4% to 4.9% as reported, against growth of 0.9% in the third quarter.
  • Shares were quoted about 5.1% higher in pre-market trading on Tuesday, October 27, versus the prior close.

Royal Caribbean Earnings: Why Did Shares Rise About 5% Pre-Market After the Q3 Beat?

Royal Caribbean Cruises (NYSE:RCL) reported third-quarter results before the open on Tuesday, October 27, with adjusted EPS of $6.57, up 14.3% from $5.75 and above market estimates of $6.38 as screened. Diluted EPS under US GAAP was $6.45 against $5.74, and adjusted net income was $1,760 million against $1,577 million.

Shares were quoted at $295.48 in pre-market trading on October 27, about 5.1% above the October 26 close of $281.15. The move followed the beat, and commentary that 2027 bookings are running ahead of historical levels at higher rates.

Revenue rose 9% to $5,591 million, a touch below the $5.61 billion estimate, as capacity grew about 8%.

Royal Caribbean Yields and Costs: Why Did Net Yields Rise Only 0.9% in the Quarter?

Net yields rose 0.9% as reported and 0.6% in constant currency. Capacity rose about 8% to 14.8 million passenger cruise days, guests carried rose 9% to 2.7 million, and load factor was about 112%.

Net cruise costs excluding fuel per available passenger cruise day fell 1.9% as reported, which management attributed to expense timing shifting into the fourth quarter. Adjusted EBITDA rose to $2,539 million from $2,293 million, and the margin widened to 45.4% from 44.6%.

Royal Caribbean Guidance: What Does the $17.85 to $17.95 Outlook Assume?

Fourth-quarter adjusted EPS is guided to $3.48 to $3.58, and full-year adjusted EPS to $17.85 to $17.95. Fourth-quarter net yields are guided up 4.4% to 4.9% as reported (4.2% to 4.7% in constant currency), and full-year net yields up about 2.7% as reported (about 2.1% in constant currency).

Net cruise costs excluding fuel per passenger cruise day are guided at minus 1.5% to minus 1.0% in the fourth quarter. Capacity is guided up 5.0% in the fourth quarter and 6.6% for 2026, and net interest at $995 million to $1,005 million for the year.

Management said booking volumes are up in the mid-teens across major channels since the last earnings call, 2027 sailings are booked up in the high teens. It reaffirmed a 20% adjusted EPS compound growth target from 2024 through 2027, pointing to a $20-handle in 2027,.

Royal Caribbean Balance Sheet and Sandals Deal: What to Watch After the Beat?

Total debt was about $22.4 billion against about $21.3 billion at the end of 2025, with $851 million of cash and $7.4 billion of liquidity. The company issued $1.25 billion of 5.550% senior notes due 2034 in the quarter, and scheduled maturities are $2.4 billion in 2027.

For the first nine months, share repurchases were $1,035 million against $655 million, and dividends paid were $1,075 million against $552 million. Capital spending for 2026 is about $4.6 billion.

The company agreed to acquire a 50% interest in Sandals and Beaches Resorts, expected to close in early 2027 and be accounted for under the equity method. Investors will watch fourth-quarter yields against the 4.4% to 4.9% guide, the timing of costs that slipped into the quarter, and early 2027 pricing.