Carnival in trouble

[tejmar]

This year hasn't been too good for the largest cruise line.

 

http://finance.yahoo.com/q/h?s=ccl

 

I just hope they don't cut back on the quality to make up for the mounting losses.

[cactusrose]

Of course taking a ship the size of the Star out of service for a couple of months is going to impact on their earnings, but I wouldn't call it mounting losses. They are still a profitable company, just won't be as profitable this next quarter. One of the measurements of a good company is their ability to weather adversity. If you are interested in CCL stock, I would look at this as a buying opportunity.

[cruisecastle]

This year hasn't been too good for the largest cruise line.

 

http://finance.yahoo.com/q/h?s=ccl

 

I just hope they don't cut back on the quality to make up for the mounting losses.

 

 

What losses? They make money why the lies?

[TNTLAMB]

I didn't see anything about mounting losses. But I did put in a buy order. thanks for the heads up, shoulda thought of it myself.

[cactusrose]

What losses? They make money why the lies?

 

cruisecastle. . . I don't think the OP was lying, just read an article and misunderstood the impact.

[custompcsys]

cruisecastle. . . I don't think the OP was lying, just read an article and misunderstood the impact.

 

I don't understand how the OP, or anyone reading the articles the OP linked to for that matter, could construe "mounting losses" or that "Carnival is in trouble" from what they read there, especially when the WSJ article even states quite clearly that their opinion is that "Carnival will sail past these roadblocks". They clearly state that their EPS for this quarter and the year is taking a hit because of the Star incident and 63% higher fuel prices, not that the company is on the verge of bankruptcy.

[chasetf]

cruisecastle. . . I don't think the OP was lying, just read an article and misunderstood the impact.

 

Carnival Corp. said Tuesday that the cost of repairs and canceled cruises stemming from last week's deadly fire on its Star Princess ship will result in about a 4 cent to 5 cent reduction in second quarter and full-year earnings per share. Carnival last week forecast earnings of 48 to 50 cents per share for the second quarter, and from $2.90 to $3 per share for 2006.

Take the 5 cents a share loss, multiply by 850.98 million shares outstanding and you get $42,550,000 loss due to the fire.

[JXOPF]

Has there been any official cause of fire given yet?

[flynrph]

Take the 5 cents a share loss, multiply by 850.98 million shares outstanding and you get $42,550,000 loss due to the fire.

 

I would venture that most of that is lost revenue from the ship out of service.

[FamilyGuy1010]

I would venture that most of that is lost revenue from the ship out of service.

 

Agreed. They probably have some form of high deductible insurance to cover the damage.

 

Carnival, as a corporation, will be just fine. There earnings and revenue will be lower than forcast, but they'll still turn a profit.

[Thanksforyourinfo]

If you are interested in CCL stock, I would look at this as a buying opportunity.

 

Yes. I am not a stock-buying person. (Retirement funds invested in the market funds, not in individual companies.) If I were someone who follows the market, I would snatch up Cruise Company stocks now. People are reactive to bad news. Money people take advantage of that. I would expect the cruise companies to come back from this. Reason being, people from the United States are going on cruises because they are afraid to go overseas and stay in hotels in Europe/Asia/S. Amer./Africa/etc. They will go to the Caribbean from U.S. and many will go overseas and sleep on the ship. This situation will not change much soon, and cruiselines will now be trying hard to win over our confidence.

[d5480]

Higher interest rates may cause a reduction in consumer spending which has the potential of reducing the number of people cruising. This in the short term may mean an even lower stock price.

[kitty9]

http://www.miami.com/mld/miamiherald/business/14209630.htm

 

 

Above is a link to an article in the Miami Herald about Carnival/Star Princess. It's going to cost them a bundle.

 

Also, once you're at the Herald website, if you search under Star Princess, it will take you to another article that says the insurance industry expects to raise their premiums for cruise ships by a large dollar amount due to the fire on the Star.

 

Then you have to add to the mix the problems Carnival has had with their ship, Sensation, and the negative press they received recently. The Sensation was just returned to service after being lent out to FEMA. The first cruise, if you can believe the media, has been, to say the least, not good. They failed the Coast Guard Inspection, causing passengers to sit in the terminal for 10 hours while the ship was repaired, and according to the passengers, the ship was a mess----dirty, smelly and many other things. Add to that the negative press received when Carnival kicked a couple off the ship because they allegedly complained to the Captain, quite vocally, their displeasure with the cruise. When the couple returned from a tour in the Bahamas, it was reported that they were told they could not come back on the ship, as the Captain kicked them off because of their "behavior". You must realize that the man involved in this is a Iraq War vet, who just returned home and was using this cruise to celebrate his safe return.

[gopher's girl]

I also think that they lowered their EPS to hold onto money for the potential litigation. Big companies do this as soon as there is a problem.

[Globaliser]

Has there been any official cause of fire given yet?

No.

 

You might want to read this thread, which would give you an insight into why you can't expect an answer within days.

[CruisinChris]

Also, take a look at the thread I posted on Martime Accident Reporting to see an example (and the level of detail of a report) and the actual timing. It takes quite a long time for the full report to be release. They will likely release a preliminary finding when they're able to make a conclusion. Just like in a plane accident.

[cactusrose]

Carnival Corp. said Tuesday that the cost of repairs and canceled cruises stemming from last week's deadly fire on its Star Princess ship will result in about a 4 cent to 5 cent reduction in second quarter and full-year earnings per share. Carnival last week forecast earnings of 48 to 50 cents per share for the second quarter, and from $2.90 to $3 per share for 2006.

 

Take the 5 cents a share loss, multiply by 850.98 million shares outstanding and you get $42,550,000 loss due to the fire.

 

Yep! Just under 2% of there profits for last year. This does not exactly constitute mounting losses.

[spongerob]

Yep! Just under 2% of there profits for last year. This does not exactly constitute mounting losses.

40 million here, 40 million there...pretty soon you're talking some serious money! :) It's a huge hit financially, but I agree it's not going to sink the entire ship.