CCL Stock catches wind in sails from todays forecasts

[LMaxwell]

CCl Earnings call revealed losses below expectations; forward forecasts into 2023 remain strong across all brands under CCL umbrella with bookings and cancellation behaviors mirroring 2019 pre-covid.  I myself had called for the stock to be in the sub $7 range by EOY, but did pick up a bunch at $8 ahead of the earnings call. There's enough extra to sell off any gains, pay the short term capital gains taxes, and then basically have free 100 shares forever to collect shareholder OBC.  No word on when or if dividend payments will resume. 

[Crazy For Cats]

I saw a report that CCL will be selling three ships.  Two are from Costa and the third didn’t specify which brand.  No ship names were provided.

[BermudaBound2014]

18 minutes ago, LMaxwell said:

CCl Earnings call revealed losses below expectations; forward forecasts into 2023 remain strong across all brands under CCL umbrella with bookings and cancellation behaviors mirroring 2019 pre-covid.  I myself had called for the stock to be in the sub $7 range by EOY, but did pick up a bunch at $8 ahead of the earnings call. There's enough extra to sell off any gains, pay the short term capital gains taxes, and then basically have free 100 shares forever to collect shareholder OBC.  No word on when or if dividend payments will resume. 

 

Nice play :).

 

Important to note that CCL still LOST money this quarter, they just didn't lose as much as was predicted. I don't think we have seen the bottom just yet because the debt is so massive. But regardless; today is a nice bounce for the longs and I always like to hear it when the little guys do well.  

[ontheweb]

I would not hold my breath waiting for the dividend to come back. 😢

 

Pre-covid, it was such a good stock. It went up, at some point they doubled the dividend, and there of course was the stockholders OBC.

[LMaxwell]

53 minutes ago, BermudaBound2014 said:

 

Nice play :).

 

Important to note that CCL still LOST money this quarter, they just didn't lose as much as was predicted. I don't think we have seen the bottom just yet because the debt is so massive. But regardless; today is a nice bounce for the longs and I always like to hear it when the little guys do well.  

 

Losing less than expected is something of a minor win; but I think it is the forecasts and future outlook that is causing the bump.  I would never buy only enough for the shareholder credit; then I am married to it.  Buy ample amount to quickly cash out of any bump and leave 100 shares leftover for free for life.   I needed to tax loss harvest in other areas anyways before EOY, the short term cap gains won't really impact me at all.  

 

Last time I cashed out was at $48 a share.  Don't think we are seeing that any time in the next 2 to 3 years.  Or this decade. 

[BermudaBound2014]

5 minutes ago, LMaxwell said:

 

Losing less than expected is something of a minor win; but I think it is the forecasts and future outlook that is causing the bump.  I would never buy only enough for the shareholder credit; then I am married to it.  Buy ample amount to quickly cash out of any bump and leave 100 shares leftover for free for life.   I needed to tax loss harvest in other areas anyways before EOY, the short term cap gains won't really impact me at all.  

 

Last time I cashed out was at $48 a share.  Don't think we are seeing that any time in the next 2 to 3 years.  Or this decade. 

 

Decade.

 

I call BS on the forecast. They bragged about future bookings, but failed to mention that a great majority of these future bookings were made with drastically reduced deposits. Princess offered $1 deposits and then went all rah rah rah on a record breaking day for future bookings.  Smoke and mirrors. 

 

I played the cruise lines a bit differently taking the short route. Let's just say it has been extremely lucrative. Now I foresee all three lines just bumping along. I do expect today's gains to be lost. It's all about the debt. CCL was barely making enough to make the current interest only payments in the height of cruising. We still have a long way to go.

[LMaxwell]

3 minutes ago, BermudaBound2014 said:

Now I foresee all three lines just bumping along. I do expect today's gains to be lost. It's all about the debt. CCL was barely making enough to make the current interest only payments in the height of cruising. We still have a long way to go.

 

I think the reduction and elimination of covid-restrictions on most mass market lines/itineraries has bolstered future cruise deposits and interest. We are approaching a point in time where bookings are organic and not as heavily based on FCC's and canceled cruise credits. 

 

I think the whole market is going to trade sideways for the next couple of years. If demand, bookings, and revenue remain solid each of these companies will have more opportunities to kick the can down the road and continue to restructure debt.  

 

Do I think these are great investments that I would put large sums of money in? No. Do I think there is potential for upside? Yes. I didn't touch any of this toxic sludge the past couple of years and that was the right play. Shorting them up to your eyes was the right play. 

[BermudaBound2014]

No doubt the elimination of covid restrictions gave a TREMENDOUS boost to bookings. I hate to think what the financial conditions would be had the restrictions remained in place. It's obvious that the majority of people wanted cruise covid restrictions gone. 

 

Did you actually see numbers regarding FCC's?? 10%? 15%? I haven't had time to listen to the earnings call or really dive deep as the Holiday Preparations have swamped. 

 

Agree on sideways for the entire market overall and I'm bearish for most industries the first half of 2023.

 

Agree that there is potential for upside in the cruise industry. I also believe there is potential for downside. I think it boils down to ability to kick the can. If, as you say, the industry can continue to kick the can there is potential for upside but even then I think we are talking decades to reach pre-pandemic levels. Sadly, I think the industry is still in a rough spot.

 

Currently I am not holding significant short or long positions.  It's a roulette game.

 

 

 

 

 

[jeh10641]

Usually when I buy stock, it is for long term. I bought CCL in the mid-20s and more around 10. I also bought NCLH around 9. I am bullish on the industry. I used the On-Board credit on HAL a year ago.

 

Jim

[HappyInVan]

"CCL Stock catches wind in sails from todays forecasts"

 

Is that a little too optimistic???

 

According to Reuters, CCL has been cutting costs. This the pax already knew. The problem is that occupancy is still only 90%, despite the huge boost from dropping all covid health protocols.

 

“Carnival Corp posts smaller loss as it tightens control on costs..”

 

https://ca.finance.yahoo.com/news/carnival-corp-posts-smaller-loss-144215505.html

 

Anyway, the stock price is just $8.50. Down from $9 a week ago and $9.70 a fortnigt ago.

 

What concerns me is the amount of budgeted capital outlay for CCL. Just for the Newbuild Capital Expenditures $4.3b (2022), $2.6b (2023). See Page 21 of the 2021 Annual Report.

 

https://www.carnivalcorp.com/static-files/fe45aec4-02e8-4aaa-9ff2-308ec21a488b

 

This adds a lot of capacity in 2023/4 into an ongoing pandemic. Can they actually fill these ships at a decent price??

 

[RD64]

HappyInVan - you hit the nail on the head. It is very easy to fill the ships  (occupancy numbers are nothing but smoke and mirrors) but at a decent price is a totally different thing.

[LMaxwell]

3 hours ago, HappyInVan said:

"CCL Stock catches wind in sails from todays forecasts"

 

Is that a little too optimistic???

 

 

No. 

 

Good old cruise critic. I could say the sky is blue and immediately some expert will argue it's brown. 

[LMaxwell]

55 minutes ago, RD64 said:

HappyInVan - you hit the nail on the head. It is very easy to fill the ships  (occupancy numbers are nothing but smoke and mirrors) but at a decent price is a totally different thing.

 

What is a decent price? 

 

It is "very easy" to fill ships? Because many of the cruise lines have not been sailing at 100%++ occupancy for much of 2022 and seeing much higher demand and organic bookings for 2023 and beyond. 

 

The big trend is towards onboard spending. Increased charges for onboard services and expenses. More upcharge items than ever before. Items previously included cut out or available at premium surcharges.  

 

So is the price per room the metric to measure when so much more emphasis is onboard spend and revenue? 

 

I bought this stuff prob 10 years ago for $30 a share, and dumped it in 2019 when it came back under $50 a share; enjoying the dividend all along, and my long term cap gain at the end of that.  At $8 this week, I'll bite. It's not $6, but it feels good under $10 still.  This is not a long term investment for me any longer. I believe in the industry, and I believe debt will be restructured, several times, by all the big players. It's very cheap to pick up a few hundred shares and sell any overage on small pops, reclaim my money and keep 100 shares tucked away for OBC for the rest of my life. This isn't investment advice. I am not a financial adviser. I don't work for these companies. Do your own research to determine if this is something you'd want to own and analyze your own risk. 

Edited December 22, 2022 by LMaxwell

[HappyInVan]

2 hours ago, LMaxwell said:

Good old cruise critic. I could say the sky is blue and immediately some expert will argue it's brown. 

ome of us actually read the financial...

 

https://www.carnivalcorp.com/news-releases/news-release-details/carnival-corporation-plc-provides-fourth-quarter-2022-business

 

While CCL is breaking even at the operational level, “U.S. GAAP net loss of $1.6 billion, or $(1.27) diluted EPS and adjusted net loss of $1.1 billion, or $(0.85) adjusted EPS, for the fourth quarter of 2022.”

 

Revenue in 4th Q 2022 was “$3.8 billion, which was 80% of 2019 levels.” Break out your calculator. That's a $1 billion revenue shortfall for the quarter while interest costs have soared.

 

“Occupancy in the fourth quarter of 2022 was 19 percentage points below 2019 levels, on capacity in guest cruise operations approaching 2019 levels. This was better than the third quarter which was 29 percentage points below 2019 levels on 8% lower capacity than 2019.”

 

Bookings are near 2019 levels, because of low low prices and minimal deposit requirements. CCL is trying hard... to dress the books. But I can't describe them as having wind in their sails. Rather, their ships appear to be water logged.

 

 

 

[LMaxwell]

6 minutes ago, HappyInVan said:

ome of us actually read the financial...

 

https://www.carnivalcorp.com/news-releases/news-release-details/carnival-corporation-plc-provides-fourth-quarter-2022-business

 

While CCL is breaking even at the operational level, “U.S. GAAP net loss of $1.6 billion, or $(1.27) diluted EPS and adjusted net loss of $1.1 billion, or $(0.85) adjusted EPS, for the fourth quarter of 2022.”

 

Revenue in 4th Q 2022 was “$3.8 billion, which was 80% of 2019 levels.” Break out your calculator. That's a $1 billion revenue shortfall for the quarter while interest costs have soared.

 

“Occupancy in the fourth quarter of 2022 was 19 percentage points below 2019 levels, on capacity in guest cruise operations approaching 2019 levels. This was better than the third quarter which was 29 percentage points below 2019 levels on 8% lower capacity than 2019.”

 

Bookings are near 2019 levels, because of low low prices and minimal deposit requirements. CCL is trying hard... to dress the books. But I can't describe them as having wind in their sails. Rather, their ships appear to be water logged.

 

 

 

What was onboard spend per passenger now versus 2019? 

[HappyInVan]

4 hours ago, LMaxwell said:

What was onboard spend per passenger now versus 2019? 

 

Unclear because the 'soundbites' in the press statement are contradictory...

 

“For the cruise segment, revenue per passenger cruise day ("PCD") for the fourth quarter of 2022 increased 0.5% (3.8% in constant dollar) compared to a strong 2019... Revenue in the fourth quarter of 2022 was $3.8 billion, which was 80% of 2019 levels.”

 

An indication would be that revenue for 4^th Q was 20% below 2019, while occupancy was 19% below. So, all that HIA activity is merely offsetting the low cruise prices that were set earlier in the year.

 

Now, the CEO is touting that “The company's full year 2023 cumulative advanced booked position is higher than its historical average at higher prices in constant currency.”

 

Unfortunately, inflation continues at high levels. So, the prices that are set today will be eroded by higher costs in 2023.

 

The key will be the industry's excess capacity. CCL can take customers away from the competitors by offering higher value. The competitors will have to take customers back by matching or exceeding CCL's offers. Zero sum game.

 

The problem for CCL is that capacity will increase by 3% in 2023 despite the reduction of the fleet's older ships. At a time when they need to have 10% less capacity.

[BermudaBound2014]

23 hours ago, LMaxwell said:

  I myself had called for the stock to be in the sub $7 range by EOY...

 

It's early yet, but CCL lost all of yesterday's gains in the first 30 minutes of trading. Opened yesterday at 8.09. Trading right now at 8.09. This is consistent with the pattern of all three cruise lines over the last 14-16 months. Earnings release sees a nice pop. After the analysists really crunch the numbers there is a drop the next day. Not sure how much is market manipulation, but this pattern has been very consistent. 

 

[Hlitner]

BAH Humbug!  I am an investor realist and I see only clouds in the near future of CCL (and HAL).  Why?  Let's consider that CCL now has over $34 Billion in debt during a time when interest rates are increasing.  The Corporation has really tightened its belt and only has 5 ships on order (across all 9 brands) none of which are for HAL.  All those 5 ships were ordered prior to COVID.  

 

I think that CCL has changed their attitude from a growth strategy to a survival strategy.  The priority must be the paying down of much of that debt and this it a big problem.  In its best years CCL made 2 less than $3 Billion in profit and now it still is losing about $1 Billion every quarter (although the rate of loss is dropping).  

 

Where does this leave HAL?  Hard to know but assuming that the remaining older ships are on the chopping block we might see HAL go through a period of shrinkage.  

 

I do see MSC as a big problem for the CCL Corporation.  Unlike the other 3 major cruise line brands, MSC has very deep pockets (because of the huge profits from their Container Ship arm) and reasonable debt.  MSC continues to add new ships (I think they now have about 21) plus they are in the process of starting a new luxury cruise line, Explora Journeys, which will likely have 6 ships within a few short years (the first ship starts sailing next summer).    RCI, with its own debt problems, has really established itself in the Mega-ship category and that particular market seems to be quite strong.  

 

So what is the market for HAL?  History tells us the line generally excels at longer more exotic itineraries all over the world.  But, in this they have some good competition, with Oceania. Azarama and Viking offering a smaller ship experience (favored by many old HAL fans).  And all the negative posts about HAL are concerning and are likely to drive away some future business.

 

Hank

[BermudaBound2014]

Well the market was down today, but CCL was down more than the market. Not only were all yesterday's gains erased, it closed at $7.88.  The market is volatile. Easy bank for the swing traders. I sat this round out. 

 

[HappyInVan]

Princess is having their 'Best Sale Ever'!!!!

 

35% off and $750 bonus for Princess Plus. Whatever that is?

 

Edited December 23, 2022 by HappyInVan

[LocoLoco1]

23 hours ago, Hlitner said:

BAH Humbug!  I am an investor realist and I see only clouds in the near future of CCL (and HAL).  Why?  Let's consider that CCL now has over $34 Billion in debt during a time when interest rates are increasing.  The Corporation has really tightened its belt and only has 5 ships on order (across all 9 brands) none of which are for HAL.  All those 5 ships were ordered prior to COVID.  

 

I think that CCL has changed their attitude from a growth strategy to a survival strategy.  The priority must be the paying down of much of that debt and this it a big problem.  In its best years CCL made 2 less than $3 Billion in profit and now it still is losing about $1 Billion every quarter (although the rate of loss is dropping).  

 

Where does this leave HAL?  Hard to know but assuming that the remaining older ships are on the chopping block we might see HAL go through a period of shrinkage.  

 

I do see MSC as a big problem for the CCL Corporation.  Unlike the other 3 major cruise line brands, MSC has very deep pockets (because of the huge profits from their Container Ship arm) and reasonable debt.  MSC continues to add new ships (I think they now have about 21) plus they are in the process of starting a new luxury cruise line, Explora Journeys, which will likely have 6 ships within a few short years (the first ship starts sailing next summer).    RCI, with its own debt problems, has really established itself in the Mega-ship category and that particular market seems to be quite strong.  

 

So what is the market for HAL?  History tells us the line generally excels at longer more exotic itineraries all over the world.  But, in this they have some good competition, with Oceania. Azarama and Viking offering a smaller ship experience (favored by many old HAL fans).  And all the negative posts about HAL are concerning and are likely to drive away some future business.

 

Hank

I think you are correct. Punishing $Debt$ servicing hobbles them and future  Competition will humble them.