caribill Posted March 25, 2014 #1 Share Posted March 25, 2014 (edited) At today’s phone conference with stock analysts to discuss the most recent quarter’s earnings report, there was some interesting information about Princess as well as the other brands that Carnival Corporation owns. o Advertising costs (including all brands) is up 14% in the past year. The recent Princess advertising campaign was after two years of no advertising for Princess. o Earnings have been affected by the additional marketing costs o The Galveston Ship Channel oil spill will have about a 1 cent/share effect on earnings if the channel reopens this week. Much of the costs involved are expected to be recovered later in the year from insurance and those responsible for the spill. Three ships are currently affected (the CB and two Carnival ships). o The situation in Ukraine has only affected Costa itineraries so far with a May sailing replacing Ukraine with a stop in Bulgaria and an overnight in Istanbul. No changes in place for third quarter sailings on any of the brands (including Princess), but they could happen. Itineraries that call in Ukraine represent about .7% of Carnival Corp capacity. o The two ships that will be based in Japan part of the time (obviously both Princess) represent about 1% of Carnival Corp capacity. There is slower than expected demand growth in the Japanese market. It is growing, but “somewhat less than anticipated.” o Overall, Carnival Corp bookings are at a higher rate than last year but with lower pricing overall. Although at a higher rate, it is still at the lower end of historical booking rates. o Alaska itineraries are being booked at a higher rate than last year, also with lower pricing. However the higher number of current bookings means higher pricing is expected to be in place on the remaining inventory. o The Caribbean is challenging because there is a 19% industry capacity increase in that area this year. There is little or no capacity increase expected there next year. o Bookings are recovering from the ship incidents at Carnival and Costa but have not yet recovered to the 2008 level of yields. Costa bookings are adversely affected by the current European economy. Costa represents about 15% of Carnival Corp capacity. o Management is not worried that consumers are getting used to lower pricing. o Lower pricing and its effect on the three main categories of passengers: With lower pricing, loyalists to a brand may take an extra cruise or two. New cruisers are often attracted to Carnival brands based on price. Switchers (those loyal to other brands) are the hardest to attract and lower pricing helps. o Carnival Corp spends $1.3 billion a year on crew travel (airfare, hotels) as is looking to save money in this area. o Cruising is the “greatest vacation value there is.” Edited March 25, 2014 by caribill Link to comment Share on other sites More sharing options...
OCruisers Posted March 25, 2014 #2 Share Posted March 25, 2014 Caribill ... Great summary of the conference call. Thanks for doing this. :) LuLu ~~~ Link to comment Share on other sites More sharing options...
hillslife Posted March 25, 2014 #3 Share Posted March 25, 2014 Great info..nice synopsis...thanks for sharing:p Link to comment Share on other sites More sharing options...
Pam in CA Posted March 25, 2014 #4 Share Posted March 25, 2014 Thanks for the great info. Link to comment Share on other sites More sharing options...
Roses2 Posted March 25, 2014 #5 Share Posted March 25, 2014 Thanks for posting the information. As a long time investor in the cruise industry, I still believe it is a relatively solid sector for long term investment. Your information bolsters that belief. Any time Carnival drops into the lower 30s we see it as a buy. Link to comment Share on other sites More sharing options...
Pythian Posted March 25, 2014 #6 Share Posted March 25, 2014 Thanks Caribill - I'd seen the stock took a hit today (down about 5% at noon) and was wondering what was disclosed / discussed this morning. This was a really good overview and makes me think the market is just reacting to a general saturation in the cruise market. I'll do what Carnival suggests and take an additional cruise on Princess this year and enjoy the price benifit. Link to comment Share on other sites More sharing options...
rpbanks Posted March 25, 2014 #7 Share Posted March 25, 2014 Stock down over $2 a share Link to comment Share on other sites More sharing options...
CruzinNoony Posted March 25, 2014 #8 Share Posted March 25, 2014 Thanks for taking the time to post this interesting information.:) Link to comment Share on other sites More sharing options...
caribill Posted March 25, 2014 Author #9 Share Posted March 25, 2014 Thanks Caribill - I'd seen the stock took a hit today (down about 5% at noon) and was wondering what was disclosed / discussed this morning. This was a really good overview and makes me think the market is just reacting to a general saturation in the cruise market. I'll do what Carnival suggests and take an additional cruise on Princess this year and enjoy the price benifit. The "hit" was due to the earnings press release which had slightly lower estimates for the next quarter's earnings as well as the full year. For all stocks, the market usually reacts more than warranted to small changes in results or estimates when compared to what analysts were expecting. Link to comment Share on other sites More sharing options...
AE_Collector Posted March 25, 2014 #10 Share Posted March 25, 2014 (edited) o Carnival Corp spends $1.3 billion a year on crew travel (airfare, hotels) as is looking to save money in this area. Thanks fur the report Caribill! I wondered about the cost of transportation of employees. I heard a good example of this talking with a guitar player from Florida on a recent cruise. He was done a 7 month "gig" as we arrived in Florida on a trans Atlantic. He said they had him tentative to get on that ship as it did the east bound TA but couldn't get their act together to get him onboard as it left Florida for the Mediterranean. Just after it left they finalized his contract and had to fly him to either the Canary Islands or the Azores where something went wrong and he missed the ship so they again had to fly him to the next stop. All I could think as a shareholder is what were they thinking when he wanted to step onboard right where he lives in Florida but they thought nothing of spending thousands of dollars to get him to the ship! o Cruising is the “greatest vacation value there is.” Absolutely! Terry Edited March 25, 2014 by AE_Collector Link to comment Share on other sites More sharing options...
A1A Posted March 25, 2014 #11 Share Posted March 25, 2014 Thanks Carbill Appreciate the summary, great info and very informative! Ken Link to comment Share on other sites More sharing options...
Rare ontheweb Posted March 25, 2014 #12 Share Posted March 25, 2014 Did they extend the stockholder's OBC benefit for another year? Link to comment Share on other sites More sharing options...
greenie082756 Posted March 25, 2014 #13 Share Posted March 25, 2014 As a future CCL stockholder thank you for posting the summary of the meeting. Thanks! :) Link to comment Share on other sites More sharing options...
beg3yrs Posted March 25, 2014 #14 Share Posted March 25, 2014 Did they extend the stockholder's OBC benefit for another year? Shareholder OBC benefit extension is not generally announced during a stock analyst conference call. However, the benefit was recently extended for another year. Link to comment Share on other sites More sharing options...
guxu Posted March 25, 2014 #15 Share Posted March 25, 2014 They mentioned "Lower pricing" a lot. But did you guys see lower pricing? I cruise every year. I did not see lower pricing at all. I can only cruise in peak seasons (spring break, summer, Xmas/New Year). Maybe they lowered price in non-peak seasons? Link to comment Share on other sites More sharing options...
ischeer Posted March 25, 2014 #16 Share Posted March 25, 2014 Did they extend the stockholder's OBC benefit for another year? Yes, they did extend it for sailings through 31 July 2015 Link to comment Share on other sites More sharing options...
gelo7 Posted March 25, 2014 #17 Share Posted March 25, 2014 Thanks, for sharing. Link to comment Share on other sites More sharing options...
Happy2cruise Posted March 25, 2014 #18 Share Posted March 25, 2014 Interesting....thanks for posting! Link to comment Share on other sites More sharing options...
cnd crsr Posted March 25, 2014 #19 Share Posted March 25, 2014 Thank you for passing on this information, Caribill. Link to comment Share on other sites More sharing options...
Working 2 Cruise Posted March 25, 2014 #20 Share Posted March 25, 2014 Very interesting information! Thank you Caribill. I guess we won't be seeing last year's fabulous sales price on Alaska cruises! Link to comment Share on other sites More sharing options...
Kenswing Posted March 25, 2014 #21 Share Posted March 25, 2014 (edited) Nevermind.. :o Edited March 25, 2014 by Kenswing Link to comment Share on other sites More sharing options...
RickEk Posted March 25, 2014 #22 Share Posted March 25, 2014 Very interesting information! Thank you Caribill. I guess we won't be seeing last year's fabulous sales price on Alaska cruises! You never know... :) Link to comment Share on other sites More sharing options...
caribill Posted March 25, 2014 Author #23 Share Posted March 25, 2014 Shareholder OBC benefit extension is not generally announced during a stock analyst conference call. However, the benefit was recently extended for another year. It is always announced in the Annual Report which came out at the end of February or beginning of March. Link to comment Share on other sites More sharing options...
Go-Bucks! Posted March 26, 2014 #24 Share Posted March 26, 2014 Thanks for the info. I was wondering why my stock price dropped 4.95% today! :( But I'm "ahead" anyway and love my OBC. Link to comment Share on other sites More sharing options...
Rare cruisequeen4ever Posted March 26, 2014 #25 Share Posted March 26, 2014 That was interesting! Makes me want to invest just to get the insider info.! Sent using the Cruise Critic forums app Link to comment Share on other sites More sharing options...
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