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CCL stock gets hit this morning on earnings news:


DaveOKC
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One June 20, 2019, this news hit the market.  Interesting read of all the details (not provided here), so you might want to check it out for yourself.

 

"June 20 (Reuters) - Carnival Corp cut its profit forecast for the year on Thursday due to the Trump administration's sudden ban on cruises to Cuba and higher expenses related itinerary changes for one of its ships."

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1 hour ago, DaveOKC said:

One June 20, 2019, this news hit the market.  Interesting read of all the details (not provided here), so you might want to check it out for yourself.

 

"June 20 (Reuters) - Carnival Corp cut its profit forecast for the year on Thursday due to the Trump administration's sudden ban on cruises to Cuba and higher expenses related itinerary changes for one of its ships."

 

One ship?   That is hard o accept or understand.   Several ships yes but not one.

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Full year profit guidance was cut from $4.35-$4.55 to $4.25-$4.35, with the drop coming in the current quarter.

Consensus of analysts was $4.54.

CCL down 10% pre-market.

NCLH down 4% and RCI down 2.5% in sympathy.

 

The internet is a lousy place to get investment advice, but if you cruise one of these companies lots, I'd suggest you factor the Shareholder Benefit OBC into whether or not you want to buy at least 100 shares.

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The market hasn't opened yet, as this is being written. Pre-market trading is not always in alignment with what happens when  the market opens. Particularly over the longer term. 

 

I agree, Cuba is a relatively small part of Carnival Corp's business. Not going to lose any sleep over this, but there may be a buying opportunity here, at least briefly.

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1 hour ago, KirkNC said:

I have a negative basis in the stock thanks to the shareholders benefit.

 

13 minutes ago, Tampa Girl said:

 

Interesting.  How do you figure that?  Are you counting in the dividends, BTW?

My dividends and OBC also now equal more than I paid for the stock.

 

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10 minutes ago, richwmn said:

 

My dividends and OBC also now equal more than I paid for the stock.

 

Us too. Wish we had bought more when we did to be honest. 😁

Edited by fatcat04
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We bought 100 shares years ago for the OBC and because cruising overall is here to stay for a while, and we have been on Seabourn, Cunard and next week HAL. Flexibly company in terms of cruising. Could be a buying opportunity for HAL fans who cruise a lot. 

Edited by zentraveler
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1 hour ago, Tampa Girl said:

 

Interesting.  How do you figure that?  Are you counting in the dividends, BTW?

 

Easy....what I paid minus OBC (shareholder credit) minus dividends (even though those are nothing special).  So I am currently holding stock that CCL has completely reimbursed me for my cost plus some.

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How many cruises do you think you took to break even?:).  Does Carnival stock work for all their companies?  Same for RCCL for Celebrity etc?  Brokers don’t seem to like cruise stocks but know you can buy yourself

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5 minutes ago, lizinvan said:

How many cruises do you think you took to break even?:).  Does Carnival stock work for all their companies?  Same for RCCL for Celebrity etc?  Brokers don’t seem to like cruise stocks but know you can buy yourself

I don't know about RCCL or Celebrity.

With CCL it would depend on your mix of cruises. If you took only 14 day cruises, the OBC of $250 alone would cover the cost. Add the dividend and it would cut that number down by $50 for each quarter you own the stock. If you took only 7 day cruise, you would be looking at about 50 cruises, minus the dividends.

And yes, CCL goes for all companies under the Carnival Umbrella

Edited by richwmn
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2 minutes ago, lizinvan said:

How many cruises do you think you took to break even?:).  Does Carnival stock work for all their companies?  Same for RCCL for Celebrity etc?  Brokers don’t seem to like cruise stocks but know you can buy yourself

 

Brokers don't like any stock that they're afraid you will buy and hold forever. They make money when you buy and sell and buy something else.

As a $50 stock, CCL is paying a 4% div on a 12 P/E, with about 50% debt-to-equity which is not a ton of debt. Anything can happen but the dividend payout of 50% looks sustainable in the medium term.

On 100 shares, your dividend is $100.

If you are augmenting 100 shares with $100 OBC each year, you are doubling your dividend (well, even moreso as the OBC is tax free). 

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6 hours ago, DaveOKC said:

One June 20, 2019, this news hit the market.  Interesting read of all the details (not provided here), so you might want to check it out for yourself.

 

"June 20 (Reuters) - Carnival Corp cut its profit forecast for the year on Thursday due to the Trump administration's sudden ban on cruises to Cuba and higher expenses related itinerary changes for one of its ships."

I dont think the court  charges and the $20,000,000.00 fine helped them along with the bad press they got

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Quick question for those of you who've used it before:
"anyone cruising on a reduced-rate or complimentary basis are excluded from this offer."

 

What is considered a reduced-rate offer? If I book through some third part site that also promises some rebate or OBC, or during a sale/promo, does that mean the OBC is no longer available?

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Thank you Dave for the information.  Will be checking this out.

 

We bought the stock when it was selling around $12 a share.  For many years we were taking 4 cruises a year.  So between Princess and HAL we got a ton of shipboard credit.  Can't remember if we got shipboard credit for Cunard.

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55 minutes ago, GenghisQuan said:

Quick question for those of you who've used it before:
"anyone cruising on a reduced-rate or complimentary basis are excluded from this offer."

 

What is considered a reduced-rate offer? If I book through some third part site that also promises some rebate or OBC, or during a sale/promo, does that mean the OBC is no longer available?

 

I've never had an issue. I always book through a TA that kicks back OBC, free gratuities etc.

What I think that language is about is casino-comped and other comped cruises.

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1 hour ago, GenghisQuan said:

Quick question for those of you who've used it before:
"anyone cruising on a reduced-rate or complimentary basis are excluded from this offer."

 

What is considered a reduced-rate offer? If I book through some third part site that also promises some rebate or OBC, or during a sale/promo, does that mean the OBC is no longer available?

Reduced rate typically refers to travel agent and interline type rates or comps which are not eligible for additional obc etc.

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Just an anecdotal observation.  We have cruised quite a few CCL lines (HAL, Princess, Seabourn, Carnival, etc) as well as other lines.  In the past 3-5 years we have noticed all kinds of cut-backs on all the CCL lines that we have cruised (also on Celebrity which is owned by RCI).  While cut-backs certainly can reduce operating costs, it also can reduce passenger volume as folks look elsewhere for more satisfaction.  Trying experiments such as charging $10 for a 2nd entrée, downgrading the quality of products in alternative restaurants, eliminating production shows, etc. etc. do take a toll.  When we started having some issues with HAL cut-backs and Celebrity cut-backs we turned to other options (such as MSC's Yacht Club).   We currently have only one future HAL cruise booked (a 30 day voyage next year) out of our 6 currently booked  cruises.  And we have our doubts about that one HAL voyage (Yokohama to Vancouver) because of all the entertainment cut-backs on the line.  Do we want to be on a ship for 30 days with zero production shows, dark nights,  movies that masquerade as main shows, etc?  Honestly no!  But we do like cruising on HAL (5 Star Mariners) so have not YET cancelled that booking.  Our thinking is that HAL has time to make "adjustments" before that future cruise (next April) and we enjoy this line enough that we are willing to give them the time.  But as we have previously posted, it does appear that HAL has lost its way and senior management seems to have no clue as where they want to take this line...other then down some kind of drain :(.

 

And it is not just HAL. For example, Princess recently removed chairs from all their regular cabins.  Now, most Princess cabins apparently have a single chair (the one at the desk).  Since most cabins have at least two passengers one wonders how to folks are supposed to sit in a single small desk chair if they decide to enjoy room service breakfast..or simply want a place to sit other then on the bed.  And there are numerous other cut-back examples from the various mass market lines.  One of our friends, who until recently did over 100 days of cruising a year, has completely stopped cruising in favor of decent All-Inclusive resorts and other land trips.  They have literally been driven away from cruising by the cut-backs in overall quality.

 

Hank

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It is a changing landscape.  To me the problem is HAL and others just focus on expenses.  Personally I think they charge too little up front.  Look at the price of a cruise today compared to ten years ago, not higher, probably lower.  Particularly for milk run cruises like Caribbean or Alaska.  I would rather pay more (nothing crazy) and get some of our lost “things” back.  I was hoping Viking was going to work, smaller ships but I really like the Asian crews on HAL plus as 5 star we have a lot invested in HAL and want the perks, as little as they are.  What to do....

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I wonder if part of the reason why Carnival and others are struggling is because of supply and demand.   There are many new ships coming online, comprising 38,000 new rooms in 2019.  If you take an average of 1 week per cruise, with two people per room , that translates into almost 4 million(38000*52*2) new travelers to fill just the new ships. 

 

Also, I beleve people are looking for other vacation experiences.  In my case, when I was working, a cruise was a simple answer to a vacation as it was easy.  You pick the location and the cruiseline takes care of everything, including the flight!  I have always enjoyed cruises(done mainly Celebrity and Princess).

 

Now that I have retired, I am finding other options which will also give me a better experience at the destination.  For example, I was looking at a greek island cruise and with a little research could easily take ferries between islands and then spend more time in each island, so I can experience it more.  Sure, I would have to do things like find hotels and restaurants, but there are so many resources on-line, there are lots of options to explore.   Also, if you enjoy doing that, it gives you a bit of a hobby in your free time!  I understand that not everyone will want to do this.   The good thing about cruising is that you can just drop your luggage and not have to pack again until you leave!  The downside is that you do not get to experience the destination the same way as if you are staying there.

 

The baby boomers are getting to retirement age(or are already there).  Traditionally, over the past few years, this has been a large cohort that have taken advantage of cruising.  Maybe with their new found freetime, they will look at other options outside of cruising.  

 

I know in my case, I will still cruise, but will look at other vacation options.  As my interest in researching destinations go down, I may cruise more in the future. 

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