Royal Caribbean Group (NYSE:RCL) stock traded higher Tuesday after the cruise operator reported third-quarter 2026 results that topped Wall Street's adjusted earnings expectations and raised its full-year profit outlook, despite a revenue miss.

Q3 Earnings Beat, Revenue Misses Estimates

Royal Caribbean reported adjusted earnings of $6.57 per share, beating the analyst estimate of $6.38.

Quarterly revenue rose 9% year over year to $5.591 billion, missing the consensus estimate of $5.607 billion.

GAAP diluted earnings per share increased to $6.45 from $5.74 a year earlier.

Net income rose to $1.735 billion from $1.579 billion. Adjusted net income totaled $1.760 billion, while adjusted EBITDA reached $2.539 billion, representing a 45.4% margin.

Strong Cruise Demand Drives Passenger Growth

Royal Caribbean reported an 8% increase in capacity and carried 2.7 million guests during the quarter, up 9% year over year. The company's load factor reached 112.4%.

Net yields increased 0.9% as reported and 0.6% in constant currency, supported by stronger-than-expected close-in demand in Europe and the Caribbean.

Net cruise costs, excluding fuel, per available passenger cruise day declined 1.9% as reported and 1.8% in constant currency. The company attributed the lower costs partly to expenses shifting into the fourth quarter.

Booking volumes increased by a mid-teens percentage across all major channels, while bookings for 2027 sailings grew by a high-teens percentage.

"Demand for our leading vacation experiences remains strong, and while it is still early, 2027 bookings are pacing ahead of historical levels at higher rates," said Jason Liberty, chairman and CEO of Royal Caribbean Group.

Royal Caribbean Expands With Sandals Resorts Deal

Royal Caribbean also recently announced an agreement to acquire a 50% stake in Sandals and Beaches Resorts, expanding its presence beyond cruises.

The deal includes 18 operating resorts and three properties under development.

The transaction is expected to close in early 2027 and be immediately accretive to earnings. Its contribution to 2027 results will depend on the timing of the closing.

Royal Caribbean generated $1.6 billion in operating cash flow during the quarter.

The company ended the period with $851 million in cash and cash equivalents, approximately $22.36 billion in current and long-term debt and $7.4 billion in liquidity.

During the quarter, Royal Caribbean issued $1.25 billion in senior unsecured notes, using the proceeds to repay floating-rate term loans and debt maturing in 2027.

The company expects full-year capital expenditures of approximately $4.6 billion.

Raises 2026 Earnings Outlook

Royal Caribbean raised its full-year adjusted earnings guidance to $17.85 to $17.95 per share, up from its previous outlook of $17.73 to $17.87. The revised range exceeds the analyst estimate of $17.83 per share.

The company's full-year revenue guidance of $19.549 billion remains below the consensus estimate of $19.582 billion.

For the fourth quarter, Royal Caribbean expects adjusted earnings of $3.48 to $3.58 per share, below the analyst estimate of $3.66.

The company said higher fuel costs and currency rates would partially offset the benefit of stronger third-quarter performance.

RCL Price Action: Royal Caribbean Group shares were up 7.76% at $302.37 at the time of publication on Tuesday, according to market data.