Royal Caribbean Cruises stock rises on earnings beat, travel demand confidence

The Yahoo Finance Live show discusses the rise of Royal Caribbean shares on Q1 earnings, and the confidence in summer travel demand, despite competitors and the economic slowdown.

Video transcript

- Let's talk about my pick here. We're talking about Royal Caribbean. Better than expected quarterly results lifting that stock, up nearly 7%. The company's latest results signaling the travel boom showing no signs of abating. Higher ticket prices helped offset higher fuel costs in the quarter, leading to a smaller than expected loss. And the cruise line said bookings in Q1 of this year outpaced 2019 levels by, in their words, a very wide margin. Royal Caribbean CFO Naftali Holtz telling Yahoo Finance earlier today that he's not too concerned about waning demand in the case of an economic downturn.

NEFTALI HOLTZ: We continue to see very strong demand. We do not see any cracks in the consumer. And we are very, very focused on making sure we deliver on that experience. And as we look forward, that is what we are seeing. And if you kind of look a little bit longer term, cruise has been exceptionally well, even in a very different economic environment. So we're very excited about what's ahead.

- Well, the cruise liner now expects annual adjusted profit to come in around $4.40 to $4.80. That is a huge uptick from its earlier forecast. And, Seana, we keep hearing about the big demand coming this summer. But, really, it has been ramping up for some time.

- It has been. And it seems like at least from these numbers, from what we've seen from even its competitors out there, that cruising is back, and that it's accelerating at a quicker pace than we had initially anticipated. A couple of Street commentary here. Stifel saying that this was a, quote, "mic drop moment that we have been waiting for." Truist saying that it was the best quarterly cruise results versus expectations that we have seen in many years. So the Street very encouraged by those booking trends that we've seen and the rebounding faster, which I'm surprised about that it was, what, exceeded in 2019 by a wide margin. I would still think a lot of people would be a little bit of a hesitancy here to go on a cruise given what happened in 2020.

- Seana, I remember there was a point people were getting trapped on cruises. No one wanted to go on any type of cruise. This is just such a crazy comeback. And like you said, we're seeing it across the board. All of those competitors, Carnival echoing very similar projections as well. So the cruise-- I mean, that is the biggest comeback to me, I think. Don't call it a comeback. But it certainly is.

- I don't think we're the demographic, by the way, Allie, because we keep saying, I'm still not going to get on a cruise.

- Exactly.

- I know. I'm too scared. I'm too scarred by what happened back in 2020, Allie, with what you were saying, everyone being stuck on those cruises.