Royal Caribbean is slashing its annual profit forecast after a surge in fuel costs

The cruise operator now expects adjusted earnings of $17.10 to $17.50 per share, down from a prior forecast of $17.70 to $18.10

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Royal Caribbean $RCL cut its full-year adjusted profit forecast on April 30, citing higher-than-anticipated fuel costs based on current at-the-pump rates, net of hedging impacts.

Adjusted earnings per share guidance for fiscal 2026 has been revised to $17.10 to $17.50, a step down from the $17.70 to $18.10 range the company had previously projected, according to the company. Fuel expense for the full year is expected to reach about $1.3 billion, though the company noted that figure would be about 4% lower if rates were based on the forward curve. The updated guidance also reflects an impact on Middle Eastern itineraries operated by TUI Cruises due to geopolitical events, the company said, partially offset by lower non-fuel costs and the benefit from share repurchases.

The swing in fuel expenses accounts for a $0.62-per-share drag relative to what the company had previously forecast, Reuters reported.

First-quarter adjusted earnings came in at $3.60 per share, well ahead of the $3.19 per share consensus estimate among analysts, Reuters noted. Net income attributable to the company was $941 million, or $3.48 per share, compared with $730 million, or $2.70 per share, in the first quarter of 2025. Total revenues reached $4.5 billion, an 11% increase year over year, the company said.

Shares climbed roughly 5% before the opening bell, lifted by the stronger-than-expected quarterly results.

The company said demand remained strong, with bookings during April continuing to exceed the same period last year. Bookings for Mediterranean and West Coast of Mexico itineraries had moderated in March and early April due to geopolitical developments but have since recovered and are running at a higher pace than the same time last year, the company said.

For the second quarter, the company expects adjusted EPS of $3.83 to $3.93. Net yields for the second quarter are expected to increase about 0.9% as reported compared to 2025, with higher exposure to itineraries affected by recent global events, the company said.

During the first quarter, Royal Caribbean returned about $1.1 billion to shareholders through $836 million in share repurchases and $270 million in dividend payments. As of March 31, 2026, the company's liquidity position was $6.9 billion, including cash and undrawn revolving credit facility capacity.

"Demand for our vacations remains healthy, with consumers continuing to prioritize experiences even as they navigate the impact of global events," CFO Naftali Holtz said in a statement.

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