SS/RCCL Finances: Improving, Options, Questions??!!

[saminina]

Terry,  the announcement regarding Seabourn....I might have been off by a week or two.

You'll red about it soon.

[TLCOhio]

19 hours ago, saminina said:

Terry,  the announcement regarding Seabourn....I might have been off by a week or two.  You'll read about it soon.

 

Appreciate this follow-up regarding Carnival . . . and what might be happening with their Seabourn brand.  On the Seabourn Cruise Critic Board since the Spring, there have been a variety of posts hinting at the rumors that interests connected with the Saudi government/powers will be taking over Seabourn.  Truth or lie?  Interesting speculation?  The Saudi investors, flush with billion in oil revenues, had invested earlier in Carnival and are working to upgrade their tourism/cruise capabilities.  I can see what feeds these rumors and gossip.  But, there are "interests" who hate and/or distrust the Saudi government and their secret and/or less-than-positive practices.  

 

And if the Saudi powers take over Seabourn, how do they make it work operationally?   Running a cruise line in good times is not easy.  These days, it is even harder to make it all work smoothly, including dealing with staffing, supply chain issues, maintaining quality levels, etc.  Reactions and added info?  Our first cruise was with Seabourn in June, 2006, Athens to Istanbul.  It was a totally wonderful and amazing experience on one of their earlier "triplets" that only had about 200 passengers.  

 

From the Wall Street Journal, below are the charts for this past week affecting the three major cruise lines.  Definitely, it was an "upswing" week.  The overall stock market was also moving up, UP, showing a more positive recovery.  Will it last?

 

THANKS!  Enjoy!  Terry in Ohio

 

Lisbon, NWSpain, Bordeaux/Brittany: Live/blog, June 2017 from Portugal to France along scenic Atlantic Coast on the Silver Spirit.  Now at 32,651 views.  Many pictures, details for history, food, culture, etc.:

www.boards.cruisecritic.com/showthread.php?t=2511358

 

From the Wall Street Journal, below are the charts during the past week for the three major cruise lines. Moving up, but where headed for later this year and in early 2023?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

Since the start of 2022, here has been the trend-line for RCL during the past nearly ten months.:

 

During this past week, here has been the trend-line for the overall S&P 500 Index.  Upward is the summary for the overall market.  Right?  Is that good and a bit of a needed recovery?:

[rkacruiser]

7 hours ago, TLCOhio said:

Truth or lie?  Interesting speculation?

 

This is "old news".  A CC poster found an article on a travel agency's website dated May, 2022 about the sale.  Another travel writer put this "new" information on his Facebook page recently.  If there was any change in Seabourn's ownership, by SEC regulations, CCL would have had to publicly made it know to the investment community well before now.  Personally, if the "news" is on Facebook, I discount such information immediately!  

[TLCOhio]

On 10/29/2022 at 5:29 PM, rkacruiser said:

This is "old news".  A CC poster found an article on a travel agency's website dated May, 2022 about the sale.  Another travel writer put this "new" information on his Facebook page recently.  If there was any change in Seabourn's ownership, by SEC regulations, CCL would have had to publicly made it know to the investment community well before now.  Personally, if the "news" is on Facebook, I discount such information immediately!  

 

Appreciate this wise follow-up from our SW Ohio neighbor about how rumors might be "old news".  Or, not?   And, clearly speculation and gossip does not make it anything like what might be called real, actual, honest "news".  I have written that California travel agent (with whom I have previously communicated with by email) and have received nothing back from him.  That tells me lots!!  Right or wrong?  

 

From the Wall Street Journal's sister publication of Barron's this morning, they had this headline: “Royal Caribbean Beats Earnings Estimates. Why the Stock Is Falling” with these highlights: “Royal Caribbean beat earnings estimates in the third quarter as demand remained robust but offered disappointing guidance for the current quarter.  Cruise operator Royal Caribbean (ticker: RCL) reported third-quarter adjusted earnings per share of 26 cents on revenue of $3 billion. That beat analysts’ consensus expectations for adjusted earnings per share of 20 cents on revenue of $2.99 billion, according to FactSet.”

 

Here is more from their report this am: "For the fourth quarter, Royal Caribbean expects total revenue of $2.6 billion and a loss of $1.30 to $1.50 per share. Net interest expense, excluding expected loss on extinguishment of debt, is expected to be in the range of $355 million to $365 million, above the $301 million expected.  Royal Caribbean sounded more optimistic about 2023, however, noting that early booking trends were strong and at record pricing levels."

 

Oh, a loss of $365 million is kind of like one-third of a BILLION DOLLARS??  And, this is just in one quarter with the ships being some closer to full??  Here is the final note in their reporting: "The shares have fallen 35% so far in 2022, as of Wednesday’s close, underperforming the S&P 500 which has declined 21% over the same period."

 

Is this a good time for stock investing?  Or, will things continue downward before bouncing back up after the recession is over?

 

Full story at:

https://www.barrons.com/articles/royal-caribbean-earnings-stock-51667479831?adobe_mc=MCMID%3D54633612909599303722862007499480498454|MCORGID%3DCB68E4BA55144CAA0A4C98A5%40AdobeOrg|TS%3D1667486861&noredirect=y

 

THANKS!  Enjoy!  Terry in Ohio

 

Panama Canal? Early 2017, Fort Lauderdale to San Francisco adventure through Panama Canal.  Our first stops in Colombia, Central America and Mexico, plus added time in the great Golden Gate City. Now at 31,559 views.

http://boards.cruisecritic.com/showthread.php?t=2465580

 

From the Wall Street Journal at 11:18 am today, here is their chart showing some unusual down and up reactions to this Barron's article and the quarterly finance reporting.:

(Open your screen/viewer wider to see this visual larger/better!)

[TLCOhio]

From the BBC this morning, they had this headline: “Bank of England expects UK to fall into longest ever recession” with these highlights: “The Bank of England has warned the UK is facing its longest recession since records began, as it raised interest rates by the most in 33 years.  It warned the UK would face a 'very challenging' two-year slump with unemployment nearly doubling by 2025.  Bank boss Andrew Bailey warned of a 'tough road ahead' for UK households, but said it had to act forcefully now or things 'will be worse later on'.  It lifted interest rates to 3% from 2.25%, the biggest jump since 1989.”

 

WOW!!  Cruise lines, especially Silversea, traditionally have had a decent number of customers from the UK.  If the economy is that challenged in the UK, it might have some impacts on cruise lines. Right or wrong?  Are things that difficult in the UK and what do those from there view as the economic prediction/climate for the next year or two for the UK?

 

Full story at:

https://www.bbc.com/news/business-63471725

 

THANKS!  Enjoy!  Terry in Ohio

 

From late 2018, see “Holy Lands, Egypt, Jordan, Oman, Dubai, Greece, etc.”, with many visuals, details and ideas for the historic and scenic Middle East. Now at 21,308 views.  Connect at:

www.boards.cruisecritic.com/topic/2607054-livenautica-greece-holy-lands-egypt-dubai-terrypix’s/

[rkacruiser]

6 hours ago, TLCOhio said:

 I have written that California travel agent (with whom I have previously communicated with by email) and have received nothing back from him.  That tells me lots!!  Right or wrong?  

 

Your experience reinforces my opinion.  

 

6 hours ago, TLCOhio said:

Oh, a loss of $365 million is kind of like one-third of a BILLION DOLLARS??  And, this is just in one quarter with the ships being some closer to full??

 

Pricing has to improve for such losses to cease.  

 

6 hours ago, TLCOhio said:

Is this a good time for stock investing?  

 

Not in a cruise line.  Yet, the data that I have seen indicate that there is significant amounts of income sitting in some people's bank accounts that could be used.  

 

Another poster on a different Forum of CC provided some surprising news.  Former Carnival Corporation CEO Arnold Donald has resigned from his position as a member of CCL's Board of Directors.  (No reason was given in the news release.)  He hasn't been retired from CCL for very long.  

[Stumblefoot]

1 hour ago, rkacruiser said:

Former Carnival Corporation CEO Arnold Donald has resigned from his position as a member of CCL's Board of Directors.  (No reason was given in the news release.)  He hasn't been retired from CCL for very long.  

Heading to run Manfredi's new (old) cruise line?

[TLCOhio]

21 hours ago, Stumblefoot said:

Heading to run Manfredi's new (old) cruise line?

 

With due respect to Sumblefoot, my sense is that former Carnival Corporation CEO Arnold Donald is way too smart to get tangled up with a new cruise line (Crystal) that is going to need to take on bunches and bunches of new debt to finance ship re-do's and massive start-up costs.  And, deal with angry folks and heat coming from previous Crystal customers who got stiffed and will not get their money back.  Who wants to sign on from that type of bitterness from past failures??

 

Plus, media reports have said for the coming periods, he will still be on contract to Carnival as a "consultant'.  I am sure he will be paid well to make sure that inside "trade secrets" do not leak out.  Appreciate these follow-ups.  Keep 'em coming!!

 

From the Wall Street Journal late this afternoon, below are the charts for the three major cruises and their performance during this past week.  Clearly on Thursday am, the quarterly Royal Caribbean finance report caused some "tensions".  But things recovered.  And during the week, the overall stock market was impact by the Federal Reserve upping interest rates higher and higher.  And, making clear that more rate hikes are coming during future months.  Plus, bad economic news this week from the UK, etc.  

 

THANKS!  Enjoy!  Terry in Ohio

 

Summer 2019 Calgary, Jasper/Banff National Parks, Western Canada Rocky Mountaineer rail adventure, Vancouver, sailing up to Alaska on Silver Muse, post-cruise excursion to Denali, etc.  Many visuals and details from our first in these scenic areas!  Live/blog: 

https://boards.cruisecritic.com/topic/2682584-live-terryohio-silver-muse-alaska-canadarockies-pix’s/

 

From the Wall Street Journal, below are the charts during this past week for the three major cruise lines. Does this visually represent a "rocky" week?  At the bottom, for comparison purposes, is the performance of the more widely-representative S&P 500 chart from the WSJ during this past week.:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

[rkacruiser]

23 hours ago, TLCOhio said:

And, making clear that more rate hikes are coming during future months.  Plus, bad economic news this week from the UK

 

But, there does seem to be a possibility that the Fed will moderate the rate hikes.  Our friends in the UK, unfortunately, are headed into months of economic woes, I am afraid.  (Please keep the contagion on your side of the Pond, my UK friends,)  Our economic situation is so difficult to understand.  Some small signs that inflation is starting to drop.  And, some people's bank accounts are healthy while too many others are not.  

[TLCOhio]

16 hours ago, rkacruiser said:

But, there does seem to be a possibility that the Fed will moderate the rate hikes.  Our friends in the UK, unfortunately, are headed into months of economic woes, I am afraid.  (Please keep the contagion on your side of the Pond, my UK friends,)  Our economic situation is so difficult to understand.  Some small signs that inflation is starting to drop.  And, some people's bank accounts are healthy while too many others are not.  

 

Appreciate this follow-up from our Ohio neighbor, but I do not agree that the Federal Reserve will moderate their rate hikes.  Agree that these economic conditions are difficult to understand.  Also agree that some people have healthy bank accounts, while a large number are challenged, living paycheck to paycheck.  Very much a two-tier economy!!  How do cruise line executives manage and navigate through these "choppy waters"?  

 

From the below-connected financial news website this morning, they had this headline: “Royal Caribbean Returns to Profitability. Is Now the Time to Buy?” with these highlights: “Royal Caribbean Cruises returned to profitability in the third quarter for the first time since the pandemic, but after forecasting that its fourth quarter will likely show a much larger than anticipated loss, the cruise ship operator is seeing its stock sink.  The results, though, show that there remains significant pent-up demand for voyages. The second-biggest cruise line, whose stock remains 55% below the level it traded at before the COVID-19 outbreak, remains on course to return to profitability.  Unfavorable currency exchange rates, higher fuel expenses, and increased interest rates have the cruise ship operator expecting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $350 million to $400 million.”

 

Here is more of their analysis: "Demand for travel and tourism is booming. Royal Caribbean said its booking volumes for 2023 doubled during the third quarter when compared to the second quarter, and were considerably higher than it experienced back in 2019.  Royal Caribbean is preparing to meet this new era in cruising with a number of massive new ships in its fleet. It's added nine new vessels since 2019, giving it 64 ships across its various brands, and has 10 more ships on order."

 

These new ship include for Silversea.  Can they fill up these new ship and do it with higher prices as our national world economy faces a probably recession?  Any answers with certainty via your reliable Crystal Balls?

 

Full story at:

https://www.fool.com/investing/2022/11/06/royal-caribbean-returns-to-profitability-is-now-th/

 

THANKS!  Enjoy!  Terry in Ohio

 

Early 2020, many visuals and details from New Zealand/South Pacific in going from Auckland to French Polynesia.  This includes Bora Bora, Fiji, NZ experiences, etc:  Live/blog;

https://boards.cruisecritic.com/topic/2735732-live-terryohio-“new”-regatta-south-pacificnz-pix’s/

[RetiredandTravel]

4 hours ago, TLCOhio said:

 

Appreciate this follow-up from our Ohio neighbor, but I do not agree that the Federal Reserve will moderate their rate hikes.  Agree that these economic conditions are difficult to understand.  Also agree that some people have healthy bank accounts, while a large number are challenged, living paycheck to paycheck.  Very much a two-tier economy!!  How do cruise line executives manage and navigate through these "choppy waters"?  

 

From the below-connected financial news website this morning, they had this headline: “Royal Caribbean Returns to Profitability. Is Now the Time to Buy?” with these highlights: “Royal Caribbean Cruises returned to profitability in the third quarter for the first time since the pandemic, but after forecasting that its fourth quarter will likely show a much larger than anticipated loss, the cruise ship operator is seeing its stock sink.  The results, though, show that there remains significant pent-up demand for voyages. The second-biggest cruise line, whose stock remains 55% below the level it traded at before the COVID-19 outbreak, remains on course to return to profitability.  Unfavorable currency exchange rates, higher fuel expenses, and increased interest rates have the cruise ship operator expecting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $350 million to $400 million.”

 

Here is more of their analysis: "Demand for travel and tourism is booming. Royal Caribbean said its booking volumes for 2023 doubled during the third quarter when compared to the second quarter, and were considerably higher than it experienced back in 2019.  Royal Caribbean is preparing to meet this new era in cruising with a number of massive new ships in its fleet. It's added nine new vessels since 2019, giving it 64 ships across its various brands, and has 10 more ships on order."

 

These new ship include for Silversea.  Can they fill up these new ship and do it with higher prices as our national world economy faces a probably recession?  Any answers with certainty via your reliable Crystal Balls?

 

Full story at:

https://www.fool.com/investing/2022/11/06/royal-caribbean-returns-to-profitability-is-now-th/

 

THANKS!  Enjoy!  Terry in Ohio

 

Early 2020, many visuals and details from New Zealand/South Pacific in going from Auckland to French Polynesia.  This includes Bora Bora, Fiji, NZ experiences, etc:  Live/blog;

https://boards.cruisecritic.com/topic/2735732-live-terryohio-“new”-regatta-south-pacificnz-pix’s/

 

 

Has RCL discussed a defined plan to pay off the debt?  If I recall they have pushed the 2023 debt out but eventually they will have to start to pay the debt down.  The stock has performed great since the summer still but still way off its 52 week high.  The Fibonacci ~35 call was a good one.

 

 

[rkacruiser]

8 hours ago, TLCOhio said:

Agree that these economic conditions are difficult to understand.  

 

An article in today's paper pointed out that both Pepsico, Coca-Cola, and Chipotle are not seeing resistance to the increase in pricing on their products.  Profits of some food preparation companies are doing quite well.  McDonald's is reporting somewhat disappointing results, but, the strength of the US dollar in their international markets is a reason for that.  In that same article, a shopper reported that it has been months since she bought a steak.  Too expensive for her family.  It is indeed a two tier economy.  

[TLCOhio]

16 hours ago, rkacruiser said:

McDonald's is reporting somewhat disappointing results, but, the strength of the US dollar in their international markets is a reason for that.  In that same article, a shopper reported that it has been months since she bought a steak.   It is indeed a two tier economy.  

 

Agree with our SW Ohio neighbor as to how the economy is moving more in a direction of being "two-tier".  Some consumers have more and flexible money.  Some do not.  Will have more comments and an added follow-up shortly.  For Silversea and other higher-end cruise lines, that might work out OK.  For the mass-market cruises lines, that could be more challenging to fill up ships holding 2500 to 6000 passengers on each sailing. And to get them to open their wallets for lots of "extras" for beverages, tours, spa, etc., spending.    

 

From the Wall Street Journal's sister publication of Barron's late last week, they had this headline: “Royal Caribbean Stock Swings Higher Despite Disappointing Outlook. 2023 Looks Strong.” with the highlight and "spin" of being focused on 2023.  Weren't they in late 2020 and 2021 focused on profits in 2022??  What happened to 2022 profits?  And, interest rates are soaring, making paying off the billions of dollars in borrowing more costly.  Right? 

 

Full story at:

https://www.barrons.com/articles/royal-caribbean-earnings-stock-51667479831?adobe_mc=MCMID%3D54633612909599303722862007499480498454|MCORGID%3DCB68E4BA55144CAA0A4C98A5%40AdobeOrg|TS%3D1667834054&noredirect=y

 

THANKS!  Enjoy!  Terry in Ohio   

 

Barcelona/Med: June 2011, with stops in Villefranche, ports near Pisa and Rome, Naples, Kotor, Venice and Dubrovnik. Great visuals with key highlights, tips, etc. Live/blog now at 255,498 views.

www.boards.cruisecritic.com/showthread.php?t=1426474

[TLCOhio]

From this Wall Street Journal-connected financial website, they had this headline: “Norwegian Cruise Line's Pricing in Focus Ahead of 3Q Results -- Earnings Preview” with these highlights: “Norwegian Cruise Line Holdings is scheduled to report results for the third quarter on Tuesday morning.  PROFIT: Analysts surveyed by FactSet expect the cruise operator to post a quarterly loss of 76 cents a share, compared with a loss of $2.29 a share a year earlier.  SALES: Analysts expect the company to log sales of $1.59 billion, according to FactSet, up from $153.1 million a year earlier.  BOOKINGS: Royal Caribbean Group, which reported third-quarter results last week, said it saw a jump in 2023 bookings during the quarter, particularly after it pulled down many of its Covid-19 policies after Labor Day. Investors will be looking to see if Norwegian Cruise Line is getting the same benefit from the removal of its own Covid restrictions.”

 

Here is more from what they are saying in this story as a preview: "PRICING: When rival Carnival Corp. posted third-quarter results in September, Chief Executive Josh Weinstein said the company was suffering from its steep discounting of tickets in an effort to fill ships. Norwegian Cruise Line executives have been vocal during the pandemic of their strategy to not cut prices and instead wait for demand to return and eventually restore occupancy.  ONBOARD SPEND: Leisure and entertainment companies have broadly said that they have yet to see inflation or other economic burdens weigh on their customers."

 

Full story at:

https://www.marketwatch.com/story/norwegian-cruise-line-s-pricing-in-focus-ahead-of-3q-results-earnings-preview-271667840605

 

THANKS!  Enjoy!  Terry in Ohio

 

Norway Coast/Fjords/Arctic Circle cruise from Copenhagen, July 2010, to the top of Europe. Scenic visuals with key tips. Live/blog at 245,333 views.

www.boards.cruisecritic.com/showthread.php?t=1227923

 

From the Wall Street Journal, below is how Royal Caribbean's stock value went down nearly 5% during one-day trading this day.  Plus, continued negative in after-hours trading.  As the S&P 500 was up nearly 1% Monday, Carnival and Norwegian were down, but not dropping as much today as RCL.:

(Open your screen/viewer wider to see this visual larger/better!)

[RetiredandTravel]

18 hours ago, TLCOhio said:

 And, interest rates are soaring, making paying off the billions of dollars in borrowing more costly.  Right? 

 

 

 

 

I'm guessing here but I would think RCL debt traded at higher yields back in July when the stock was in the low 30's and the US 5 year was at a 3% yield.   Treasury yields are certainly relevant to the equation but in this case the corporate spread over treasuries is probably more important.  We discussed the 12 - 14% RCL yields mentioned in a  Barron's article in early October.   In early October the 5 year was ~ 4% so the spread was about 8 -10%, RCL stock 40ish.  The stock increase over the last 1- 4 months obviously indicates investors have a more favorable view of RCL's prospects.

 

The elephant in the room is the long term debt which has grown from 8.4 billion in 2019 to 19.4 in a company that had revenue in 2019 of about 11 billion.  So to use an overly simplistic methodology if the debt isn't repaid and refinanced , lets say at 9%, the interest cost would over time  grow to 1.7 billion/year (every 1% is 194 MM).   IMO RCL has made a good move to push out the debt but eventually the LT debt has to be addressed.

[rkacruiser]

23 hours ago, TLCOhio said:

 ONBOARD SPEND: Leisure and entertainment companies have broadly said that they have yet to see inflation or other economic burdens weigh on their customers."

 

This is what does not make sense to me both afloat and ashore.   The polls say that "inflation" and the "economy" is a prime concern of our citizens, yet, the spending, both ashore and afloat remains healthy.  Are the polls incorrect?  Some have been in the past.  This Election Day may tell us a tale when the tallies are completed.  

[d9704011]

41 minutes ago, rkacruiser said:

 

This is what does not make sense to me both afloat and ashore.   The polls say that "inflation" and the "economy" is a prime concern of our citizens, yet, the spending, both ashore and afloat remains healthy.  Are the polls incorrect?  Some have been in the past.  This Election Day may tell us a tale when the tallies are completed.  

I don't know about the accuracy of 'the polls' but I'd say, at least for onboard spending, the tiny sector of the overall population/public engaged in that activity is not in the least representative of the population as a whole and drawing any conclusions about inflation and the economy from that sample space is not sound analysis.

[rkacruiser]

1 minute ago, d9704011 said:

I don't know about the accuracy of 'the polls' but I'd say, at least for onboard spending, the tiny sector of the overall population/public engaged in that activity is not in the least representative of the population as a whole and drawing any conclusions about inflation and the economy from that sample space is not sound analysis.

 

Thanks for your  comment.  Your analysis of what I read is different than mine.  

[TLCOhio]

On 11/8/2022 at 9:02 PM, d9704011 said:

I don't know about the accuracy of 'the polls' but I'd say, at least for onboard spending, the tiny sector of the overall population/public engaged in that activity is not in the least representative of the population as a whole and drawing any conclusions about inflation and the economy from that sample space is not sound analysis.

 

Appreciate these various comments and follow-ups about polls, the economy, consumer behavior, etc.  Having had some experiences over the decades with work on such survey research, it is getting harder and harder to reach "real people" and get honest feedback.  The shift to cell phones and people avoiding such calls makes it harder to connect.  Plus, many people don't trust those doing that types of research, etc.  With the "polarization", social media growth/distortions, etc., the waters are very "choppy" and confused.     

 

From the Wall Street Journal, below are the charts for the three major cruise lines.  Clearly on Thursday morning, things jumped up, UP, UP . . . big-time.  Was it the monthly inflation numbers showing a potential slow-down in future costs as the key factor moving positive the overall stock market?

 

There are still lots of crazy, financial "loose ends" out there, including this headline of "Crypto Exchange FTX Files for Bankruptcy, CEO Resigns."  Sure glad that I did not "invest" (or gamble) with that crazy Crypto crap.  Any losers out there who has lost big money with Crypto?  I always viewed it as "smoke and mirrors", not anything real and trusted.  Was I right or wrong?

 

THANKS!  Enjoy!  Terry in Ohio

 

Sydney to NZ/Auckland Adventure, live/blog 2014 sampling/details with many exciting visuals and key highlights.  On page 23, post #571, see a complete index for all of the pictures, postings.  Now at 238,939 views.

www.boards.cruisecritic.com/showthread.php?t=1974139

 

From the Wall Street Journal, below are the charts during this past week for the three major cruise lines. Does this mean these stocks are on the way to recovery?:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

[TLCOhio]

From a Wall Street financial website yesterday morning, they had this headline: “Norwegian Cruise Line: Take The Money And Run” with these highlights: “I'm only willing to buy one cruise line. Norwegian is not it.  The market seems fixated on the improvement over the pandemic era. I want to focus on the fact that Norwegian Cruise Line's sales are still down 33% from 2019.  I think it prudent to compare the most recent 9-month period to the same time in 2019, before this Covid unpleasantness. When we make comparisons to that period, things look far less rosy. For instance, revenue for the first nine months of 2022 is about 33% lower than it was in 2019, and net income is down dramatically, from a positive $809 million to a loss of $1.8 billion. Fuel, 'other', and marketing expenses were particularly troublesome in 2022, up 69%, 37%, and 34% respectively, but most costs increased across the board.”

 

This analysis looks at the world economy and how, especially in Germany, the coming slow-down (or recession) will affect countries in Europe and move downward cruise lines revenues and pricing.  Reactions, insights and comments?

 

The author's final summary point is: "Carnival is trading at a price-to-sales ratio of ~1.2 at the moment. Given that I only have so much capital, and given that I only want so much exposure to the cruise line industry, I'll continue to eschew Norwegian until something changes."

 

Full story at:

https://seekingalpha.com/article/4556413-norwegian-cruise-line-avoid-nclh-stock

 

THANKS!  Enjoy!  Terry in Ohio

 

Venice: Loving It & Why??!!  Is one of your future desires or past favorites? See these many visual samples for its great history and architecture.  This posting is now at 98,406 views.

http://boards.cruisecritic.com/showthread.php?t=1278226

Edited November 12, 2022 by TLCOhio

[TLCOhio]

From the Wall Street Journal this afternoon, below is their chart for Carnival stock.  Big, BIG drop.  Not happening that dramatically for the other two major companies, including for Royal Caribbean.  Will check more as to what is driving these negative slide.  Any guesses or added info?

 

THANKS!  Enjoy!  Terry in Ohio

 

[crusinbanjo]

I think it has to do with their new Convertible debt offering.  Some sources see the debt offering as good news for the stock and CCL, but todays investors don't seem to agree!

[d9704011]

7 minutes ago, TLCOhio said:

Any guesses or added info?

The inflation rate in the United States remains stubbornly high.  Likely, the Fed will continue to raise interest rates.  CCL has far too much debt and rising interest rates will be a real challenge for them to sevice the debt load and return to profitability.  Coupled with a difficult cold and flu season ahead, expect bookings to suffer.

[TLCOhio]

From MSN News and a financial website this afternoon, they had this headline: “Why Carnival Stock Dived 13% Today” with these highlights: “Shares of Carnival struck an iceberg on Wednesday and are sinking fast -- down 13.7% as of 11:40 a.m. EST after the cruise operator announced that it will issue $1 billion worth of new debt as it tries to roll over older, higher-interest debt taken on to get it through the pandemic.  As Carnival explained Tuesday night, its new debt (technically, convertible senior notes) will pay holders 5.75% annual interest and come due on Dec. 1, 2027. The company will float at least $1 billion worth of these notes, but potentially as much as $1.15 billion if underwriters exercise their overallotment options.”

 

Cute description of "stuck an iceberg"?  More billions in debt being rolled over?  No surprised there for Carnival and the other major cruise lines.  My guess is that will continue for many years to come.  Lots of money owed and it will take years to get profits up high enough to dig out of the deep financial hole in which they all sit right now.  

 

Here is another key point from this analysis: "When we consider that interest rates have been trending higher as the Fed continues to hike its targeted federal funds rate, it seems more likely that Carnival would end up paying more on any new debt it issues, than what it pays on the debt it's replacing."

 

Full story at:

https://www.msn.com/en-us/money/markets/why-carnival-stock-dived-13-today/ar-AA14bEuM

 

THANKS!  Enjoy!  Terry in Ohio

 

Amazon River-Caribbean 2015 adventure live/blog starting in Barbados. Many visuals from this amazing river and Caribbean Islands (Dutch ABC's, St. Barts, Dominica, Grenada, San Juan, etc.).  Now at 70,578 views:

www.boards.cruisecritic.com/showthread.php?t=2157696

[TLCOhio]

4 minutes ago, crusinbanjo said:

I think it has to do with their new Convertible debt offering.  Some sources see the debt offering as good news for the stock and CCL, but todays investors don't seem to agree!

 

Great, quick follow-up from Mr. Banjo.  Plus, agree with our friend from Ontario that higher interest rates add to the challenges for the cruise lines and others.  My guess is that interest rates will need to go higher before they trend downward.  Other reactions and insights?

 

THANKS!  Enjoy!  Terry in Ohio