NEW YORK (TheStreet) -- Shares of Royal Caribbean Cruises (RCL) - Get Report were gaining 6.5% to $79.90 Friday after competitor Carnival (CCL) - Get Report reported positive results for the fiscal first quarter.
Carnival reported earnings of 20 cents a share for the fiscal first quarter, above analysts' estimates of 10 cents a share. Revenue for the company fell 1.4% year over year to $3.53 billion for the quarter, compared to analysts' estimates of $3.57 billion.
Carnival said that cruise costs fell 9.6% in the fiscal first quarter due to lower fuel prices. Fuel prices per metric ton fell 36% from the year-ago quarter to an average price of $406.
The company also said that onboard revenue grew 4.6% year over year to $889 million in the fiscal first quarter.
Carnival's positive earnings and low fuel prices helped bring up shares of Royal Caribbean.
TheStreet Ratings team rates ROYAL CARIBBEAN CRUISES LTD as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ROYAL CARIBBEAN CRUISES LTD (RCL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 1533.33% and other important driving factors, this stock has surged by 50.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RCL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ROYAL CARIBBEAN CRUISES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ROYAL CARIBBEAN CRUISES LTD increased its bottom line by earning $3.42 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($4.76 versus $3.42).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 1464.1% when compared to the same quarter one year prior, rising from $7.02 million to $109.77 million.
- Net operating cash flow has significantly increased by 56.18% to $284.20 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 40.33%.
- You can view the full analysis from the report here: RCL Ratings Report