RCL stock erased a 10% drop after Carnival’s Q2 earnings beat estimates but guided lower for the year.
Royal Caribbean shares plunged nearly 10% in early trading before recovering to close flat at $309. The initial sell-off followed Carnival’s earnings report, despite the rival’s Q2 adjusted earnings of $0.41 per share beating forecasts and revenue hitting a record $6.7 billion.
Carnival’s revenue of $27 billion annually outpaces Royal Caribbean’s $18.4 billion, making it a key indicator for cruise stocks. While earnings rose 20% year over year, Carnival’s guidance for Q3 at $1.35 per share fell short of the $1.42 analysts expected, and full-year guidance of $2.22 trailed the $2.23 consensus.
Investors initially reacted to the cautious outlook, but RCL shares later stabilized as markets digested the mixed signals.