Royal Caribbean Cruises Ltd. Second Quarter Earnings Sneak Peek

Royal Caribbean Cruises Ltd. (NYSE:RCL) will unveil its latest earnings on Thursday, July 26, 2012. Royal Caribbean Cruises operates in the cruise vacation industry. It owns five cruise brands: Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France.

Royal Caribbean Cruises Ltd. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 3 cents per share, a decline of 93% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 2 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 3 cents during the last month. Analysts are projecting profit to rise by 27.7% versus last year to $1.98.

Past Earnings Performance: Last quarter, the company reported net income of 20 cents per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.

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A Look Back: In the first quarter, profit fell 48.7% to $47 million (21 cents a share) from $91.6 million (42 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 9.7% to $1.83 billion from $1.67 billion.

Stock Price Performance: Between April 25, 2012 and July 20, 2012, the stock price fell $2.43 (-9.1%), from $26.83 to $24.40. The stock price saw one of its best stretches over the last year between June 25, 2012 and July 3, 2012, when shares rose for seven straight days, increasing 10.1% (+$2.42) over that span. It saw one of its worst periods between July 3, 2012 and July 12, 2012 when shares fell for seven straight days, dropping 10.2% (-$2.69) over that span.

Wall St. Revenue Expectations: Analysts are projecting a rise of 4% in revenue from the year-earlier quarter to $1.84 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 10.4% in the second quarter of the last fiscal year, 12.7% in the third quarter of the last fiscal year and 10.7% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 14.4% in the fourth quarter of the last fiscal year and then again in the first quarter.

Analyst Ratings: There are seven out of 13 analysts surveyed (53.8%) rating Royal Caribbean Cruises a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.36 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company improved this liquidity measure from 0.32 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in current assets. Current assets increased 15.9% to $1.12 billion while liabilities rose by 1.1% to $3.1 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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