It is reported by the Smart Finance App that Royal Caribbean Cruises (RCL.US) announced strong third-quarter performance, but pre-market trading saw a drop due to lower fourth-quarter profit guidance than analysts' expectations.

The cruise operator reported an adjusted EPS of $5.20 for the third quarter, exceeding analysts' general expectation of $5.04. Revenue was $4.89 billion, in line with market expectations.

However, the company forecasts an EPS of $1.40-1.45 for the fourth quarter, lower than analysts' expectation of $1.57. The company stated that the negative impact of $0.24 per share in the fourth quarter, one-third of which is related to Hurricane "Milton", while the rest is due to timing shifts in costs and an increase in stock compensation.

For full-year 2024, Royal Caribbean Cruises will adjust its EPS guidance upwards to $11.57-11.62, in line with the market expectation of $11.58.

It is understood that this cruise operator has raised annual profit guidance for the fourth time this year, mainly due to multiple price increases by the company and an increase in cruise demand.

The strong post-pandemic surge in cruise demand continues, with customers willing to spend more on experiences while on board, driving growth for operators including Royal Caribbean Cruises, Norwegian Cruise Line Holdings (NCLH.US), and Carnival Corporation & plc (CCL.US).

President and CEO Jason Liberty stated: "Our outstanding third-quarter performance and upward revision of full-year expectations reflect strong demand for our unique vacation experience."

The company reported strong booking trends with a third-quarter occupancy rate of 111%. Net income increased by 7.9% year-on-year on a fixed exchange rate basis, benefiting from price increases and strong onboard revenue.

Looking ahead, Royal Caribbean Cruise expects strong booking levels to continue into 2025. Liberty added: "While we are still in the early stages of planning, we anticipate earnings per share for 2025 to start at $14."

Despite sending bullish signals, investors seem to be focusing on the relatively weak performance guidance for the fourth quarter, causing the stock price to drop more than 5% in pre-market trading on Tuesday. The company's stock price has risen 57% year to date.

Over the past 12 months, the company's stock price has risen by 146%, ranking fifth among the S&P 500 index components during the same period. Royal Caribbean Cruise is the third best-performing stock in the index in 2023, after only Nvidia (NVDA.US) and Meta (META.US), with a full-year stock price surge of 162%.