CCL Slows Ship Construction

[DirtyDawg]

58 minutes ago, staceyglow said:

If earnings numbers are calculated using Generally Accepted Accounting Principles and are signed off on by a reputable CPA firm, they are facts. All data of any kind is subject to interpretation. 

So I guess we should have all taken those Enron earnings as facts because Arthur Anderson signed off on them? Or Lehman Brothers just because  Ernst & Young (EY) signed off? 

 

I'm sorry to be flippant, but if one of my equity analysts said to me;  No worries boss, the earnings are OK because 'so and so' accounting firm signed off on them, that would be that analyst's last minute on the job.  Yes there is a U.S. GAAP's but company managements can produce very different earnings numbers depending how aggressive they want to be interpreting GAAP.

[mz-s]

13 minutes ago, DirtyDawg said:

So I guess we should have all taken those Enron earnings as facts because Arthur Anderson signed off on them? Or Lehman Brothers just because  Ernst & Young (EY) signed off? 

 

I'm sorry to be flippant, but if one of my equity analysts said to me;  No worries boss, the earnings are OK because 'so and so' accounting firm signed off on them, that would be that analyst's last minute on the job.  Yes there is a U.S. GAAP's but company managements can produce very different earnings numbers depending how aggressive they want to be interpreting GAAP.

 

Do you have any examples from this decade maybe? A lot has changed since those scandals.

[longhorn2004]

Rumor floating around that the last two Fantasy Class ships will be gone too. I think the next step will be closing the smaller ports. Will not be surprised to see either Jacksonville, Tampa or Mobile service end.

[mz-s]

Just now, longhorn2004 said:

Rumor floating around that the last two Fantasy Class ships will be gone too. I think the next step will be closing the smaller ports. Will not be surprised to see either Jacksonville, Tampa or Mobile service end.

 

Please cite the rumor you are talking about with a link.

 

Carnival's best chance at competing is in ports where they don't have to compete at all, like JAX and Mobile. Ports like Canaveral and Galveston are basically a race to the bottom for Carnival - we are seeing that now in Long Beach as RCCL has re-entered that market and Radiance cruises are at essentially giveaway prices week in and week out.

[longhorn2004]

Rumor been around for years, various cruise outlets on Youtube recently brought it back up as a concern. As Carnival's midsize fleet shrinks, it stands to reason one of the smaller markets will go away, ie. Charleston. You are not sending Dream to Tampa. Talk about "flooding" the market with cabins.

 

Almost $2 Billion in revenue versus $28 Billion in debt, its not hard to see something drastic needs to be done. I have my opinions on what the eventual solution will be.

 

In comparison Royal has $1.5 Billion in revenues, $18 billion in long term debt.

[jsglow]

28 minutes ago, DirtyDawg said:

So I guess we should have all taken those Enron earnings as facts because Arthur Anderson signed off on them? Or Lehman Brothers just because  Ernst & Young (EY) signed off? 

I'm an old Continental Bank man.  Knew Lea fairly well and had met Andy. I'll let you look that up.

 

16 minutes ago, mz-s said:

 

Carnival's best chance at competing is in ports where they don't have to compete at all, like JAX and Mobile. Ports like Canaveral and Galveston are basically a race to the bottom for Carnival - we are seeing that now in Long Beach as RCCL has re-entered that market and Radiance cruises are at essentially giveaway prices week in and week out.

Fully agree with you on this. Those ports and the iron that can fit there (and others) is valuable.  It's why I think the Spirits get Sunshined eventually.

[BlerkOne]

49 minutes ago, DirtyDawg said:

So I guess we should have all taken those Enron earnings as facts because Arthur Anderson signed off on them? Or Lehman Brothers just because  Ernst & Young (EY) signed off? 

 

I'm sorry to be flippant, but if one of my equity analysts said to me;  No worries boss, the earnings are OK because 'so and so' accounting firm signed off on them, that would be that analyst's last minute on the job.  Yes there is a U.S. GAAP's but company managements can produce very different earnings numbers depending how aggressive they want to be interpreting GAAP.

Executive Life?

 

One reason for independent auditors?

 

[mz-s]

12 minutes ago, jsglow said:

Fully agree with you on this. Those ports and the iron that can fit there (and others) is valuable.  It's why I think the Spirits get Sunshined eventually.

 

Refreshing the ships is just one part of it. As mentioned, it's not making a huge difference with Radiance sailings in terms of cabin prices - but onboard spend is I'm sure much higher vs. Victory since there are more opportunities for spending.

 

19 minutes ago, longhorn2004 said:

Rumor been around for years, various cruise outlets on Youtube recently brought it back up as a concern. As Carnival's midsize fleet shrinks, it stands to reason one of the smaller markets will go away, ie. Charleston. You are not sending Dream to Tampa. Talk about "flooding" the market with cabins.

 

Almost $2 Billion in revenue versus $28 Billion in debt, its not hard to see something drastic needs to be done. I have my opinions on what the eventual solution will be.

 

In comparison Royal has $1.5 Billion in revenues, $18 billion in long term debt.

 

So in other words nothing new. Carnival is not going to leave markets unless as in Charleston, local pressure forces their hand. Even Mobile is staying open once Spirit makes its way back, and they're expanding operations in Norfolk. Yes eventually they will no longer have ships that fit under the bridges in Tampa and Jacksonville, but that's decades in the future. And maybe by then they will have built a new cruise terminal outside of the bridge, or built a new bridge, or whatever.

[DirtyDawg]

55 minutes ago, mz-s said:

 

Do you have any examples from this decade maybe? A lot has changed since those scandals.

I did a quick google search for you.

 

https://www.justice.gov/usao-sdny/pr/former-ceo-iconix-brand-group-convicted-trial-accounting-fraud

https://www.sec.gov/news/press-release/2022-180

https://www.sec.gov/news/press-release/2022-191

https://www.sec.gov/news/press-release/2021-127

https://www.clearyenforcementwatch.com/2021/09/two-recent-settlements-highlight-heightened-sec-focus-on-accounting-fraud-and-potential-benefits-of-cooperation/

https://fortune.com/2020/06/25/wirecard-auditing-is-broken-fintech-ey-ernst-and-young/

https://www.wealthprofessional.ca/news/industry-news/bdo-slapped-with-35m-penalty-for-audit-failures/325423

https://www.ft.com/content/2c1a79e6-8cb0-4895-9005-9515e24c8677

 

 

 

 

[mz-s]

21 minutes ago, DirtyDawg said:

I did a quick google search for you.

 

https://www.justice.gov/usao-sdny/pr/former-ceo-iconix-brand-group-convicted-trial-accounting-fraud

https://www.sec.gov/news/press-release/2022-180

https://www.sec.gov/news/press-release/2022-191

https://www.sec.gov/news/press-release/2021-127

https://www.clearyenforcementwatch.com/2021/09/two-recent-settlements-highlight-heightened-sec-focus-on-accounting-fraud-and-potential-benefits-of-cooperation/

https://fortune.com/2020/06/25/wirecard-auditing-is-broken-fintech-ey-ernst-and-young/

https://www.wealthprofessional.ca/news/industry-news/bdo-slapped-with-35m-penalty-for-audit-failures/325423

https://www.ft.com/content/2c1a79e6-8cb0-4895-9005-9515e24c8677

 

Good - so as I said, lie to investors and get in trouble. Case closed.

Edited December 27, 2022 by mz-s

[DirtyDawg]

Just now, mz-s said:

 

Good - so as I said, lie to investors and get in trouble. Case closed.

Some people go to jail. Lots of others just get fined.

 

And accounting scandals continue, just like that game wack-a-mole. 

 

[jsglow]

40 minutes ago, mz-s said:

 

Refreshing the ships is just one part of it. As mentioned, it's not making a huge difference with Radiance sailings in terms of cabin prices - but onboard spend is I'm sure much higher vs. Victory since there are more opportunities for spending.

Look at it this way MZ.  Not only did the Sunshine program freshen up the ships pretty significantly, extend their useful life by maybe a decade or more, and create a bit of a marketing splash but it also probably meaningfully improved their profit generating potential per sailing by adding both additional cabins and things like Cucina upstairs. It's really smart IF you can pull it off for a reasonable price tag and have enough life in the hull/motors, etc.  If you build Radiance up from the keel is it $750MM?   

[ray98]

1 hour ago, longhorn2004 said:

Rumor been around for years, various cruise outlets on Youtube recently brought it back up as a concern.

 

Youtube?  LOL.  I don't think there is any factual information coming from there, just clickbait content to get you to watch their videos.  

[Eli_6]

I just got an ad for Icon of the Seas. It looks incredible, but then I read it will carry 10,000 including crew. No, thank you!  That's insane.  I want to book the Jubilee, but am scared because I thought MG was too full at 65 or 70 percent capacity or whatever it was in August 2021.

[Eli_6]

1 hour ago, mz-s said:

 

Please cite the rumor you are talking about with a link.

 

Carnival's best chance at competing is in ports where they don't have to compete at all, like JAX and Mobile. Ports like Canaveral and Galveston are basically a race to the bottom for Carnival - we are seeing that now in Long Beach as RCCL has re-entered that market and Radiance cruises are at essentially giveaway prices week in and week out.

I don't know about Long Beach, but I disagree on Galveston.  The only ones cruising regularly are RCCL and Carnival. Disney and NCL are only there part of the year and how many of tens of millions of people live within driving distance?  My prices for Galveston are always higher than everywhere else.

[mz-s]

1 hour ago, jsglow said:

Look at it this way MZ.  Not only did the Sunshine program freshen up the ships pretty significantly, extend their useful life by maybe a decade or more, and create a bit of a marketing splash but it also probably meaningfully improved their profit generating potential per sailing by adding both additional cabins and things like Cucina upstairs. It's really smart IF you can pull it off for a reasonable price tag and have enough life in the hull/motors, etc.  If you build Radiance up from the keel is it $750MM?   

 

For sure Sunshine is more marketable than Destiny would be at this point. And earns more. For example. But did it earn $250M more over the past decade since the overhaul? Only Carnival knows for sure. Me, I'd doubt it.

 

But still - look at say back in 2006. Carnival's latest ship was Liberty a ship basically the same as Destiny (a little larger but overall the same thing), and Royal was debuting the Oasis of the Seas. Which of those ships of similar age looks more modern today? No amount of freshing up will get the Liberty on the Oasis's level. The only way Carnival can compete without multiple new ships - which we already know isn't on their radar - is on price. And given their financial status they are positioned for a decade of hurt, and possibly bankruptcy.

 

This is only going to be more of an issue over the coming years and decades as Carnival's tonnage continues to age and its competitors (including up-and-coming entrants like MSC and Virgin) roll out brand new ships, or like NCL and RCL have more modern concepts to begin with.

 

People here may say "oh I like the smaller ships" but the bigger ships are cheaper for the lines to operate, and it seems that most guests prefer them as well in the entry level.

[BlerkOne]

2 hours ago, Eli_6 said:

I don't know about Long Beach, but I disagree on Galveston.  The only ones cruising regularly are RCCL and Carnival. Disney and NCL are only there part of the year and how many of tens of millions of people live within driving distance?  My prices for Galveston are always higher than everywhere else.

Princess is there this summer and MSC might be there in a few years.

[Eli_6]

5 minutes ago, BlerkOne said:

Princess is there this summer and MSC might be there in a few years.

I would love it if MSC comes to Galveston!

[longhorn2004]

5 minutes ago, Eli_6 said:

I would love it if MSC comes to Galveston!

Yes, they are coming to Galveston and getting a new terminal built too.

 

 

[Eli_6]

1 minute ago, longhorn2004 said:

Yes, they are coming to Galveston and getting a new terminal built too.

 

 

Is this a "for sure"?  I saw a post about this a week or two ago on the MSC page but I didn't think it was definite.  I will be so ecstatic if this comes to fruition!

 

Vista has been our "go to" because they have the Havana area, but CCL has pulled her out of Galveston as of winter 2023 and the Havana area on Jubilee just isn't the same.  Would love to cruise MSC in the Yacht Club. 

[mz-s]

10 minutes ago, Eli_6 said:

Is this a "for sure"?  I saw a post about this a week or two ago on the MSC page but I didn't think it was definite.  I will be so ecstatic if this comes to fruition!

 

Vista has been our "go to" because they have the Havana area, but CCL has pulled her out of Galveston as of winter 2023 and the Havana area on Jubilee just isn't the same.  Would love to cruise MSC in the Yacht Club. 

 

Well anything can change until the ship pulls into harbor but it's pretty close to a sure thing.

[Eli_6]

19 minutes ago, mz-s said:

 

Well anything can change until the ship pulls into harbor but it's pretty close to a sure thing.

That is AMAZING news!

[notscb]

1 hour ago, Eli_6 said:

Havana area on Jubilee just isn't the same.

Curious, what's the major difference? I'd think that all being equal (havana), the newer ship would be the easy choice.

[longhorn2004]

2 hours ago, Eli_6 said:

Is this a "for sure"?  I saw a post about this a week or two ago on the MSC page but I didn't think it was definite.  I will be so ecstatic if this comes to fruition!

 

Vista has been our "go to" because they have the Havana area, but CCL has pulled her out of Galveston as of winter 2023 and the Havana area on Jubilee just isn't the same.  Would love to cruise MSC in the Yacht Club. 

https://www.cruisehive.com/msc-cruises-and-galveston-confirm-step-toward-new-terminal/90864

 

To bring this back to Carnival, they are updating their dated facilities in Galveston to handle the XL Class of ships. So good news all around.  

Edited December 28, 2022 by longhorn2004

[Lee Cruiser]

On 12/26/2022 at 1:25 PM, BlerkOne said:

Now Carnival needs to work on getting rid of the less efficient customers. That will effectively raise revenue received without raising prices.

Who are the "less efficient customers" that you are talking about and how does Carnival get rid of them?