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Explanation for RCL stock drop?

CruznTom

By CruznTom,
in Celebrity Cruises

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hermang

hermang

Posted
Posted
Does anyone have an explanation or theory for today's $2 (4.2%) drop after reporting record 2nd quarter earnings this morning?

Wall street is fickle - if RCCL says profits doubled in Q2 - Some yutz who has never been on a cruise in his life - says- I THINK profits should have trippled.

 

I have been in the market for over 40 years and I have learned this -

What goes up goes down and what goes down goes up. It is all timing

 

I have had RCCL for about 8 years now watched it drop and watched it go way back up - I am making a buck or three and a happy camper

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TPKeller Excellent Advice! Rare

TPKeller

Posted
Posted

This is the secret scam of Wall Street.

 

These analyst folks rant and rave and tell everyone that they know what the profits and earnings will be, then when they goof it up, and the profits aren't quite as high as these analysts said they would be, the stock price goes down.

 

There are just all kinds of opportunities in this system for fraud. Yet nobody seems to care. Makes you wonder!

 

Theron

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der93711

der93711

Posted
Posted

My take on all the downward movement for RCL has to do with all that is happening in London. Terrorism makes people scared and tends to make them remember our 9/11. The market went crazy then. I had bad vibes about the stock a few days ago. If and when the dust settles, RCL will probably recover. I will watch the stock and buy again when something positive happens. Also, the mystery of the "missing groom" on Royal Carribean and all the speculations does not help.

 

Der

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Andy

Andy

Posted
Posted

Hi Everyone !

 

I know many of you think all I do is go on Cruises all day long, but... I do have a real job, in the financial services industry.

 

IMHO, RCI delivered a very nice quarter, and beat analysts expectations big time.....but you can never make some people happy.

 

As I have been in this industry for over 25 years (NO, I am NOT an analyst, and never will be thank you very much).... here are some possible reasons why the stock probably went down today.

 

1. Wall Street analysts are NEVER satisfied. When something is 99% good, they only look at the 1% that isnt good. I bet that many of these folks have never even been on a Cruise.

 

2. Rising Fuel Costs are still a problem (no surprise there)

 

3. I read something about some analysts saying that Yields were not quite what they hoped for.

 

4. I heard that some analysts slightly trimmed their earnings estimates going forward, based on today's numbers. Only slightly though.

 

5. The stock is owned by a LOT of institutions, and when they want out..... LOOK OUT BELOW. There were many large block trades today, likely by institutions taking some money off the table.

 

6. (and probably most important). This stock is up from about 10.00 or so (post 9/11), and there are still many folks who are up a great deal of $$$, so maybe they decided that since things are only 99% good, that (in their infinite wisdom) they better run for the hills. (of course, I am being sarcastic).

 

With all of this said, I am not giving you a Buy/Sell/Hold recommendation here, but I thought I could use my expertise to give you a little more insight on what likely happened today.

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Mike2131

Mike2131

Posted
Posted
Hi Everyone !

 

I know many of you think all I do is go on Cruises all day long, but... I do have a real job, in the financial services industry.

 

IMHO, RCI delivered a very nice quarter, and beat analysts expectations big time.....but you can never make some people happy.

 

As I have been in this industry for over 25 years (NO, I am NOT an analyst, and never will be thank you very much).... here are some possible reasons why the stock probably went down today.

 

1. Wall Street analysts are NEVER satisfied. When something is 99% good, they only look at the 1% that isnt good. I bet that many of these folks have never even been on a Cruise.

 

2. Rising Fuel Costs are still a problem (no surprise there)

 

3. I read something about some analysts saying that Yields were not quite what they hoped for.

 

4. I heard that some analysts slightly trimmed their earnings estimates going forward, based on today's numbers. Only slightly though.

 

5. The stock is owned by a LOT of institutions, and when they want out..... LOOK OUT BELOW. There were many large block trades today, likely by institutions taking some money off the table.

 

6. (and probably most important). This stock is up from about 10.00 or so (post 9/11), and there are still many folks who are up a great deal of $$$, so maybe they decided that since things are only 99% good, that (in their infinite wisdom) they better run for the hills. (of course, I am being sarcastic).

 

With all of this said, I am not giving you a Buy/Sell/Hold recommendation here, but I thought I could use my expertise to give you a little more insight on what likely happened today.

 

Buy the rumor, sell the fact!

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Drew358

Drew358

Posted
Posted

This is probably the company statement that hurt the stock:

 

"Looking ahead, Royal Caribbean said fuel prices at current levels could negatively impact its 2005 earnings by 14 cents a share based its on prior forecast."

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RodPat

RodPat

Posted
Posted

should I say I say I bouht 100 shares at $24.000 a share. I have used itfor at least 4 times at a discount. I don't care what it cost now. I have made my money. More than I would have wanted on 100 SHARES . sorry if this makes any one mad but I have lost money on lots of others of stoclks but this one is a winner in my book. Pat.

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canderson

canderson

Posted
Posted
Does anyone have an explanation or theory for today's $2 (4.2%) drop after reporting record 2nd quarter earnings this morning?

I don't worry about (or watch) daily activity, but this seems unusual.

Held its own today, though. It dropped 10 cents (about 0.2%) vs. yesterday's close -- $45.50 to $45.40. In after hours trading, it's at $45.46, only down 4 cents on the day.

 

With EPS estimates of $2.73, a 14 cent hit (see below) you'd be talking a 5% hit to earnings. As a pure reflection of P/E, the 4.2% hit yesterday wasn't excessive.

 

 

--------------------------------------------

NEW YORK, July 27 (Reuters) - Royal Caribbean Cruises Ltd. (RCL.OL: Quote, Profile, Research) (RCL.N: Quote, Profile, Research) , the world's No. 2 cruise group, expects higher fuel prices to subtract 14 cents a share from its 2005 profits, its chief financial officer said on Wednesday.

Luis Leon said in a conference call with analysts that if prices remained at current levels, the U.S.-Norwegian cruise operator's fuel costs would rise by $96 million, or 36 percent, over last year's, net of hedges.

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ocngypz

ocngypz

Posted
Posted

Analysts did not like the way the company handled the "expense" issue.. and something which happened a couple of weeks ago... they lost their corporate $$$ person who was very well regarded on the Street.

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daju22

daju22

Posted
Posted

Found this post on the Yahoo board:

 

Two "expert" opinions:

by: DGsen107/28/05 04:19 pm

Msg: 7995 of 7995

UBS, AGE lower Royal Caribbean estimates

28/7/2005

 

UBS shaved 6 cents off its earnings estimates for Royal Caribbean shares in both 2005 and 2006, sending its price target to $58 from $59.

‘Q2 was good but not the blowout it first appeared,’ said UBS analyst Robin Farley in a research note, pointing to 11 cents of upside borrowed from Q3 since Royal Caribbean shifted expenses into Q3 from Q2.

 

‘Management wouldn’t provide much color on what was driving the shift other than to say it was a mix of SG&A and operating expenses, including marketing, administrative, drydocking and IT projects,’ Farley said.

 

While Royal Caribbean’s guidance for 2005 seems unchanged, it includes a one-time gain for First Choice Holidays’ redemption of convertible preferred shares that offsets an operating decline, Farley noted, adding that higher fuel will still hit in 2006.

 

A. G. Edwards lowered its 2005 EPS estimate to $2.75 from $3.39, citing increased fuel-related costs and canceled cruises. AGE’s 2006 estimate went to $2.65 from $3.25.

 

Analyst Tim Conder also pointed out that the second-quarter upside was ‘solely due’ to deferral of expenses into the second half. ‘When actual net cruise costs rose only 5.7% due to non-fuel/canceled sailing costs being deferred, investors expected that at least some of the unspent marketing dollars would not be needed (due to the strong demand environment) and therefore could offset the higher “uncontrollable expenses,”’ Conder writes in a new report. However, management indicated all prior planned expenditures will be made in the second half.

 

‘We continue to believe that there is some cushion here especially as it relates to ’05 marketing budgets,’ Conder said. He sees investors as being ‘overly pessimistic on RCL’s likely conservative net yield and cost outlook.’

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TPKeller Excellent Advice! Rare

TPKeller

Posted
Posted

I know this info is elsewhere, but while we're talking about it... :)

 

What is the stockholder benefit? Some amount per cabin?

 

Can this benefit be applied to a booked cruise, if the stock is purchased after booking?

 

Just curious... it's not good to make investment decisions based on a cruise discount! :)

 

Theron

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bob278

bob278

Posted
Posted

Theron,

 

In a nutshell, if you own 100 or more shares, you can get a discount on any cruise with RCL or Celebrity. Amounts vary based on length of cruise, not cabin type. If you have enough time between when you buy the stock and your cruise (I'd estimate a week or so) you could get the credit if you buy now. This may change from one year to the next, but that is how it works now. Here's a link that should answer most of your questions.

 

http://media.corporate-ir.net/media_files/nys/rcl/reports/Shareholder_Benefit_2005.pdf

 

I agree that you should not buy the stock just to get a discount. But, if you know you can use it enough to outweigh the risk that the price will go down more than the benefit, it isn't a dumb move. I bought at 29.90 knowing I had 2 cruises booked and 2 more that I would book within the time frame for a total of $700 in benefits. I had $7.00 per share to play with.

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madforcruising

madforcruising

Posted
Posted
I know this info is elsewhere, but while we're talking about it... :)

 

What is the stockholder benefit? Some amount per cabin?

 

Can this benefit be applied to a booked cruise, if the stock is purchased after booking?

 

Just curious... it's not good to make investment decisions based on a cruise discount! :)

 

Theron

 

Hi Theron,

 

The information ýou are looking for is all here:

 

http://media.corporate-ir.net/media_files/nys/rcl/reports/Shareholder_Benefit_2005.pdf

 

The onboard credit is not based on cabin category but on cruise length.

I agree that it´s not a good reason to buy it just for the onboard credit.

 

However as others said it was one of my best investments, even not counting the already $800 for onboard credits I earned in 1 1/2 years:)

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