What Happened?
Shares of cruise vacation company Royal Caribbean (NYSE:RCL) fell 5% in the morning session after the company's second-quarter revenue slightly missed Wall Street expectations and its third-quarter profit forecast was underwhelming. The negative reaction occurred despite the cruise operator reporting stronger-than-expected second-quarter profits, with adjusted earnings of $4.38 per share, and raising its full-year guidance. However, the company's revenue of $4.54 billion came in just shy of the $4.55 billion consensus estimate. Digging deeper, concerns may have also stemmed from a projected increase in net cruise costs for the third quarter and a slowdown in net yield growth, a key measure of profitability.
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What Is The Market Telling Us
Royal Caribbean’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 13.2% on the news that the company reported strong third results, with earnings exceeding analysts' expectations while revenue was in line. Looking ahead, Royal Caribbean's positive EPS guidance for the next quarter exceeded analysts' expectations. Overall, this quarter had some key positives.
Royal Caribbean is up 46.2% since the beginning of the year, and at $334.85 per share, it is trading close to its 52-week high of $352.84 from July 2025. Investors who bought $1,000 worth of Royal Caribbean’s shares 5 years ago would now be looking at an investment worth $6,566.
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