Royal Caribbean Cruises Ltd (RCL) Stock Falls 13% After Less Than Spectacular Guidance is Reported


Royal Caribbean Cruises Ltd (NYSE:RCL) stock is down significantly this morning after the company released their 2015 earnings results as well as their guidance for 2016. While 2015 numbers were not so bad, with the company reporting that net yields had increased 3.5% on a constant-currency basis, year-over-year, and adjusted net income was $1.07 billion ($4.83 per share), which beat last years numbers of $755.7 million / $3.39 per share, 2016 guidance seems to be disappointing.

Adjusted earnings per share for 2016 is expected to come in at around $5.90 to $6.10 per share, while NCC excluding fuel are expected to be up just 1% or less on a constant-currency basis. Analysts were expecting 2016 earnings per share of $6.27. For this current quarter, Royal Caribbean Cruises Ltd (NYSE:RCL) is expecting $0.30 earnings per share, which also falls well short of analysts’ expectations of $0.46 per share.

“Our core brands are firing on all cylinders, our new ships are performing exceptionally well and our costs are well controlled. This is driving 40%+ earnings growth in two consecutive years,” said Richard D. Fain, chairman and chief executive officer. “These very gratifying results combined with a strong start to Wave position us well on our path toward Double-Double.”

The stock is down 13.14% or $11.11 following the news, hitting $73.41 per share. About 5.09 million shares traded hands or 73.13% up from the average. RCL has risen 5.91% since June 26, 2015 and is uptrending. It has outperformed the S&P500 by 13.63%.

From a total of 9 analysts covering Royal Caribbean Cruises Ltd. (NYSE:RCL) stock, 7 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 78% of the ratings are positive. The highest target price is $116 while the lowest target price is $98. The mean of all analyst targets is $108.40 which is 47.66% above today’s ($73.41) stock price. Royal Caribbean Cruises Ltd. was the topic of 16 analyst reports since August 3, 2015 according to the firm StockzIntelligence Inc. Pareto Securities upgraded shares on January 27 to a “Hold” rating. Zacks upgraded shares to a”Hold” rating and a $100 target share price in their report from an August 5. Stifel Nicolaus maintained RCL stock in a recent report from December 21 with a “Buy” rating. Finally, Argus Research maintained the stock with a “Buy” rating in a report they issued on an October 27.

The institutional sentiment increased to 1.19 in Q2 2015. It’s up 0.15, from 1.04 in 2015Q2. The ratio improved, as 51 funds sold all their Royal Caribbean Cruises Ltd shares they owned while 143 reduced their positions. 75 funds bought stakes while 156 increased their total positions. Institutions now own 137.34 million shares which is 7.19% less than the previous share count of 147.98 million in 2015Q2.

Cranberry Lake Advisors Llc holds 19.06% of its total portfolio in Royal Caribbean Cruises Ltd, equating to 322,325 shares. Folketrygdfondet owns 5.13 million shares representing 13.79% of their total US portfolio. Moreover, Majedie Asset Management Ltd has 7.72% of their total portfolio invested in the company, equating to 566,770 shares. The Massachusetts-based Altimeter Capital Management Lp has a total of 7.07% of their portfolio invested in the stock. Tremblant Capital Group, a New York-based fund reported 994,528 shares owned.

Since June 1, 2015, the stock had 0 insider purchases, and 4 insider sales for a total of $17.51 million in net activity. Fain Richard D sold 80,516 shares worth $7.96 million. Goldstein Adam M sold 90,000 shares worth $8.90 million. Lutoff-Perlo Lisa sold 205 shares worth $18,245. Pimentel Lawrence R sold 7,000 shares worth $637,000. The insider Pujol Henry L sold 7,474 shares worth $665,741.

Royal Caribbean Cruises Ltd. is a cruise company. The company has a market cap of $16.14 billion. The Firm owns various brands, such as Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisieres de France and a 50% joint venture interest in TUI Cruises. It has 28.55 P/E ratio. Together, these six brands operate a combined 43 ships in the cruise vacation industry with an aggregate capacity of approximately 105,750 berths.