Royal Caribbean Group (RCL  ), one of the world's largest cruise companies, reported Thursday first-quarter EPS of $3.48 and adjusted EPS of $3.60. Adjusted EPS beat the $3.19 estimate, while sales of $4.452 billion missed the $4.460 billion estimate. Total revenue increased 11% year over year to $4.5 billion, driven by continued demand across its vacation portfolio.

Shares were trading higher following the results.

Profit Growth, Operating Metrics

Net income rose to $900 million from $700 million a year earlier, while adjusted net income reached $1.0 billion. Adjusted EBITDA was $1.7 billion.

Capacity increased 8%, and the company served 2.5 million guests, up 12%, with a load factor of 109%. Gross Margin Yields increased 6.9%, and Net Yields rose 3.6% as reported and 2% in constant currency.

Fuel remains a key cost driver, with first-quarter bunker pricing at $613 per metric ton and consumption of 432,000 metric tons.

Demand Trends, Booking Recovery

Bookings for Mediterranean and West Coast of Mexico itineraries softened in March and early April due to geopolitical developments, but have since recovered and are running ahead of last year.

The company said its booked position reflects record pricing, while onboard spending continues to exceed prior-year levels.

Cash Returns, Balance Sheet

Royal Caribbean returned about $1.1 billion to shareholders, including $836 million in share repurchases and $270 million in dividends, and repurchased 2.9 million shares.

Operating cash flow was $1.83 billion. Cash and equivalents totaled $512 million, liquidity was $6.9 billion, and total debt was about $21.1 billion.

Outlook, Guidance Update

The company expects second-quarter adjusted EPS of $3.83 to $3.93, below the $4.05 estimate, with Net Yields rising about 0.9% as reported.

Royal Caribbean lowered full-year 2026 adjusted EPS guidance to $17.10-$17.50 from $17.70-$18.10, near a $17.18 estimate.

The company expects sales of $19.729 billion, slightly above the $19.671 billion estimate. Revenue is projected to grow about 10%, with Net Yields increasing between 2.3% and 3.3%.

Fuel costs are estimated at $1.3 billion, with 59% hedged, while capex is $5 billion and capacity rises 6.7%. Second-quarter fuel expense is expected to be about $346 million on consumption of 423,000 metric tons, with about 60% hedged.

Jason Liberty, CEO, Royal Caribbean Group, expects "another year of double-digit revenue and earnings growth, driven by consumers' preference for our leading brands and expanding portfolio - all supported by our strong booked position, leading margin profile, and fortified balance sheet."

Price Action: RCL shares were trading 7.44% higher at $272.91 at the time of publication on Thursday.