Royal Caribbean Cruises Ltd (RCL)

Return on equity (ROE)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Net income (ttm)	US$ in thousands	2,878,000	2,602,073	2,500,153	2,104,914	1,018,094	266,605	-719,693	-1,689,093	-2,160,643	-3,043,197	-4,490,529	-5,327,150	-5,260,500	-5,270,460	-5,192,670	-5,484,700	-5,797,460	-4,157,394	-1,927,394	184,726
Total stockholders’ equity	US$ in thousands	7,563,000	7,045,000	6,008,000	5,151,000	4,724,000	4,422,980	3,363,650	2,851,620	2,868,810	3,205,420	3,398,100	3,988,930	5,085,560	6,467,500	7,884,020	9,172,380	8,760,670	8,328,590	8,963,900	10,231,800
ROE		38.05%	36.94%	41.61%	40.86%	21.55%	6.03%	-21.40%	-59.23%	-75.31%	-94.94%	-132.15%	-133.55%	-103.44%	-81.49%	-65.86%	-59.80%	-66.18%	-49.92%	-21.50%	1.81%

December 31, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $2,878,000K ÷ $7,563,000K
= 38.05%

The return on equity (ROE) for Royal Caribbean Cruises Ltd has exhibited significant fluctuations over the past few years. At the start of the data series in March 2020, the ROE was a mere 1.81%, indicating relatively low profitability in relation to shareholder equity. However, this metric sharply declined in the following quarters, reaching negative values as low as -133.55% by March 2022.

The negative ROE figures indicate that Royal Caribbean Cruises Ltd was not generating sufficient returns to cover its equity costs, implying potential financial distress. The company's performance remained weak throughout 2022, with ROE figures staying deeply negative.

There was a notable turnaround in the financial performance from September 2023 onwards, with ROE turning positive at 6.03% and improving steadily to reach 38.05% by December 2024. This positive trend suggests an enhancement in the company's ability to generate profit from its shareholders' equity.

Overall, the ROE trajectory for Royal Caribbean Cruises Ltd reflects a turbulent period of financial challenges followed by a period of recovery and improvement. Investors and stakeholders may want to closely monitor future financial reports to assess the sustainability of this positive trend in profitability.