Royal Caribbean Cruises Ltd. reports spectacular 36.3% earnings growth

Royal Caribbean Cruises Ltd.’s rising revenues and earnings are coming from multiple catalysts including new ship deliveries and private destination development.

A Member of Pat McKeough’s Inner Circle recently asked for his advice on a global cruise vacation company that operates a fleet of 68 ships for millions of guests worldwide.

Pat likes the firm’s record financial performance, robust double-digit revenue and profit growth, industry-leading occupancy rates, and strong demand trends supporting premium pricing and operational expansion. However, Pat warns prospective investors should be wary of the higher valuation multiples following recent price surges. There are also industry risks such as fuel cost sensitivity, regulatory changes, and unforeseen macroeconomic headwinds that could pressure leisure travel demand and profit margins.

Royal Caribbean Cruises Ltd. (Symbol RCL on New York; www.royalcaribbeangroup.com) is one of the leading cruise companies in the world.

Founded in 1968, the company owns and operates three global cruise brands: Royal Caribbean International, Celebrity Cruises and Silversea Cruises. It also owns 50% joint venture interest in TUI Cruises GmbH (TUIC). TUIC operates the German brands TUI Cruises and Hapag-Lloyd Cruises.

[ofie_ad]

Royal’s brands have a combined fleet of 68 ships. As of December 31, 2024, that amounted to a total capacity of about 166,900 berths.

The company’s ships offer worldwide itineraries that call on more than 1,000 destinations across all seven continents.

Royal Caribbean International is the world’s largest cruise brand. It operates 28 ships in the family and premium segments of the cruise industry market.

Celebrity Cruises operates 14 ships in the premium segment. Its strategy is to target consumers by delivering destination-rich experiences on upscale ships.

Silversea Cruises operates 12 ships. It’s an ultra-luxury and expedition cruise line with smaller ships, high-end staterooms and fine dining.

Royal’s TUIC joint venture is a German tourism company. It serves the contemporary and premium segments of the German cruise market by offering products tailored to German guests. TUI Cruises operates seven ships, while Hapag-Ltd. Cruises operates two luxury liners and three smaller ships.

Inner Circle: Substantial payout increase signaled cash flow confidence

In the three months ended June 30, 2025, Royal’s revenue rose 10.4%, to $4.54 billion from $4.11 billion a year earlier.

Excluding one-time items, the company earned $1.20 billion, or $4.38 a share, in the latest quarter. That was up 36.3% from $882 million, or $3.21 a share. Earnings growth outpaced revenue growth. That’s partly because cruise operating expenses rose just 6.1%, to $2.28 billion from $2.15 billion.

Royal is riding high on the strong demand for its cruises. Indeed, the cruise industry is doing well, thanks to the still-strong rebound in travel as the pandemic has receded.

The company raised its quarterly dividend by 37.5% with the January 2025 payment, to $0.55 from $0.40. (Note that the company suspended its quarterly dividend of $0.78 a share in April 2020. It then reinstated it in October 2024, with a payment of $0.40 a share.) The stock now yields 0.9%.

The outlook for Royal is positive. Strong demand for sailings at historically high prices and rising onboard spending will likely continue for the rest of 2025 and beyond.

The stock trades at 22.3 times the $15.65 a share that the company should earn for 2025.

Recommendation in Pat’s Inner Circle: Royal Caribbean Cruises Ltd. is okay to hold.

Copy
Link copied
Email
Print

Pat McKeough

A professional investment analyst for more than 30 years, Pat has developed a stock-selection technique that has proven reliable in both bull and bear markets. His proprietary ValuVesting System™ focuses on stocks that provide exceptional quality at relatively low prices. Many savvy investors and industry leaders consider it the most powerful stock-picking method ever created.

Find 5 Safe Stocks to
Buy & Hold for Long-Term
Growth and Steady Income

No Credit Card Required

SEND ME THIS FREE REPORT

Testimonials

The cornerstones of Pat’s strategy–value, diversification and timelines–make his newsletter, The Successful Investor, highly profitable while minimizing risk. His advice is no-nonsense, down-to-earth and based on solid research. You’ll know what to invest in and what to avoid.

Chuck Chakrapani, PhD
Investors Association of Canada
The older I get the better dividends look. For retirees and would-be retirees who want to sleep at night, I can’t think of a better source of information on reliable growing dividend income than Pat McKeough’s newsletter, Dividend Advisor.

Jonathan Chevreau
Financial Post Columnist
As a manager of more than $500 million in mutual funds, I have access to the best brokerage research available in this country. But I still take time to read Pat McKeough’s premium newsletters

John Sartz
I appreciate the 25 years of above market returns I received by following your advice. at least 95% of my investment decisions were based on TSI recommendations.

Chuck J.
Subscriber since 1996. Inner Circle Member Since 2006
The newsletters I receive in Inner Circle Pro are fantastic! I have been following Pat’s advice for years and everything he has said has been amazing. His commentaries are brilliant, insightful, educational, rational and balanced. My returns are almost double the TSE and I have referred many of my friends who have switched over to your services.

Walter H.
Inner Circle Pro subscriber

Free Reports

5 Best Stocks to Buy This Month

The Successful Investor Approach to AI Investing

7 Winning Strategies for Dividend Investors

The Best Blue Chips for Canadian Investors

The ETF Investor’s Handbook

The Canadian Guide on How to Invest in Stocks Successfully

Power and Profits of Energy Stocks

Juniors to Giants: The Complete Guide to Mining Stocks

How to Find the Best Growth Stocks

7 Pro Secrets to Value Investing

Browse Topics

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund.. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

AI Investing

Artificial intelligence (AI) is essentially the merging of today’s big computing with big data. This has resulted in breakthroughs in everything from creating machines to recognize faces with more accuracy than a human, to the development of chatbots able to collect, organize and simplify all the Internet has to say on any topic.

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.