Last year's Q2 EPS was 11 cents.
William Blair thinks Royal Caribbean yields will increase approximately 3% (constant currency), above guidance of 1.5% to 2.5% and up from the 0.3% decline in Q1 when voyage disruptions dragged performance.
Distribution channel checks suggest pricing has remained healthy, with strong double-digit gains continuing in Europe and some indications of improved trends in the Caribbean since May, William Blair analyst Sharon Zackfia said in a note. Overall pricing momentum appeared quite strong in May and most of June, with more volatility in late June and into July, she added.
Zackfia also expects Royal Caribbean to perform better on net costs, excluding fuel, than the guidance of a 2% to 3% decrease as the company laps expenses related to Grandeur of the Seas' fire in the year-ago period. She doesn't anticipate fuel or currency exchange to materially affect earnings compared to expectations.
Given healthy overall trends, the brokerage thinks Royal Caribbean will reiterate or narrow its expected net yield increase of 2% to 3% (constant currency) for 2014, versus William Blair's 2.5% estimate. Zackfia projects stronger net yields in the second half of the year, up 3% to 4%, than the first half's estimated up 1% to 2%.
William Blair thinks Royal Caribbean will narrow its full-year EPS guidance of $3.25 to $3.45, compared to the brokerage's expectation of $3.33 and consensus of $3.40.
2013 EPS was $2.40.
Zackfia noted RCL shares have increased 20% so far this year, compared to 9% declines at Carnival and Norwegian, 'as investors have applauded cost-savings initiatives as well as better and more stable pricing power and earnings visibility.'
William Blair continues to recommend RCL at 13 times the brokerage's 2015 EPS estimate of $4.32 and said underlying drivers seem likely to yield above-average earnings growth over the next several years.