RCCI enjoys huge profits

[Louise34]

According to the Corporate Report in todays business section the large profit by RCCI was reported. I am certainly happy to know this, as I love this line and want it to prosper and grow. To quote: "RCCI said its first quarater profit surged on increased capacity and higher sales, helping offset rising fuel costs that have beset the cruise industry. Profit rose to $75.6 million, or 35 cents per share, from $8.8 million, or 4 cents per share a year ago. Revenue grew 17 percent to $1.43 billion from $1.22 billion".

Undoubtedly this huge profit was largely the result of all the passengers who cruised this past year and paid the fuel surcharge. Hey, rather than raising the fares or the possibility of losing the line, I know I gladly paid the surcharge to keep the line solvent. But, after seeing these profits, perhaps the surcharge can be adjusted (or eliminated) to meet RCCI's current financial needs. We all know that businesses, as well as we citizens, are in a financial crunch and will gladly pull together, but we do want it done fairly so can still afford to travel and the cruise industry can continue to grow and meet our needs.

[marci22]

"I know I gladly paid the surcharge to keep the line solvent. But, after seeing these profits, perhaps the surcharge can be adjusted (or eliminated) to meet RCCI's current financial needs."

 

Dream on, girlfriend.

[barryn]

Don't look for a decline/elimination of the fuel charge in the near future. The announcement of the increased Q1 profit was coupled with a forecast of lower profits for the full year. The investment community reacted negatively, as evidenced by the AP blurb that follows.

 

NEW YORK (AP) -- Shares of cruise operators dropped Thursday after Royal Caribbean Cruises Ltd. lowered its full-year profit forecast on escalating fuel costs.

The world's second-largest cruise company now anticipates net income between $2.85 and $3 per share, down from its prior outlook for earnings in a range of $3.20 to $3.40 per share.

[Gonzo70]

According to the Corporate Report in todays business section the large profit by RCCI was reported. I am certainly happy to know this, as I love this line and want it to prosper and grow.

 

Actually you completely misinterpreted the corporate report. It was a terrible quarter for RCL and they slashed their full year earning estimates (largely because of escalating fuel costs). The stock has been tanking and sunk further after it released this earnings report. The fuel surcharges will only go down or go away if fuel consistently returns to significantly lower levels (not likely anytime soon).

[TEXASMUNK]

Bigger ships, more pax per ship, lower fuel per pax burned (not $$$ spent but in an apple to apple comparison).

This bodes well for the long-term. It may also mean the demise of the smaller ships in the fleet sooner rather than later.

[yogimax]

Umm...

 

Check the price of the stock.

 

Nuf said!

[Firefighterhoop]

It is a buisness, NOT a needed service. It's job is to make profit for the shareholders! If you dont like to pay the surcharge put on by rccl, maybe you could try a line with out one.:p Again, it is a profitable buisness, not a non profit orginization.

 

EVERYTHING has gone up in price. (Airfare, foods, clothing,) due to inflation and obviously the gas prices

 

If the Cruise lines wern't making money, how are they supposed to pay for newer larger ships?

[yogimax]

 

This bodes well for the long-term

 

Sorry, the long term is scary.

 

1. Oil prices

 

2. Competition

 

3. Over-Capacity

[Gonzo70]

The best thing that could happen for the stock were for Carnival to purchase RCL. Good for the shareholders, very bad for cruisers as the lack of competition would enable them to jack up prices big time.

[yogimax]

The best thing that could happen for the stock were for Carnival to purchase RCL. Good for the shareholders, very bad for cruisers as the lack of competition would enable them to jack up prices big time.

 

Gonzo,

 

What makes you think that CCl would attempt to purchase RCL?

[Gonzo70]

Gonzo,

 

What makes you think that CCl would attempt to purchase RCL?

 

I am not saying I think it will happen; I am just saying in the event that it did occur, it would be good for RCL shareholders. My guess is that Carnival would not want to purchase RCL right now based on RCL's decelerating growth, the current climate of the cruise industry, and RCL's debt. Also, it may have difficulty getting approved due to antitrust issues.

[MoreCruisesNow]

Profits were very, very good, and the fact that the stock price went down doesn't mean duck squat.

 

Business for RCI is NOT declining. Prospects look very good. And the management team in place is creative, innovative, and skilled.

 

Given the feeling between Fain and Aronson, any possibility that CCI might even THINK about buying RCI is a joke...and remember, Vicki knew what ship to jump ON!

[Gonzo70]

Profits were very, very good, and the fact that the stock price went down doesn't mean duck squat.

 

Business for RCI is NOT declining. Prospects look very good.

 

lol, that was the best joke I have heard in a while. Thanks for a good laugh. :D

[yogimax]

 

And the management team in place is creative, innovative, and skilled.

 

Hah, that's the funniest line of the day!

 

If the management team is creative, innovative and skilled, please explain the price of the stock!!!

[isujim]

If I were RC..........I would be very nervous.......at least forward looking. While today's profits are very important, so is the forward statement. I believe they revised down their estimates for the full year, but someone can correct me if I'm wrong, I don't have the release at my fingertips.

 

RC has rolled the dice with freedom and genisis........bottom line if they fill the ships, they will do just fine.

 

Just off the Voyager last week following a b2b...........the second week the ship was 400 passengers short of capacity from the info we recieved. That is a lot of vacancies for one week.

 

If the economy gets worse and people start rethinking vacations......(maybe start taking shorter, closer to home vacations)........and those mega ships don't fill.........the forward outlook may not be as rosey as some loyalists might want to believe. I would think that higher inflation, higher consumer prices and higher fuel costs, plus mega ships that have to be filled, would make me have a second cocktail in the evening if I were ANY cruiseline right now........not just RC.

 

Then again, maybe they know something we don't:)

[hermang]

Hah, that's the funniest line of the day!

 

If the management team is creative, innovative and skilled, please explain the price of the stock!!!

 

Some stock analyst who has probably never been on a cruise ship gives a bad rating. Stupid investors bail and the price drops allowing for really smart traders to buy low and sell high..

 

I bought at 20 years ago saw it go to 45 or so - still have it. it is only a loss on paper but I still have a nice profit

[Gonzo70]

I believe they revised down their estimates for the full year, but someone can correct me if I'm wrong, I don't have the release at my fingertips.

 

If the economy gets worse and people start rethinking vacations......(maybe start taking shorter, closer to home vacations)........and those mega ships don't fill.........the forward outlook may not be as rosey as some loyalists might want to believe. I would think that higher inflation, higher consumer prices and higher fuel costs, plus mega ships that have to be filled, would make me have a second cocktail in the evening if I were ANY cruiseline right now........not just RC.

 

 

Yes, you are correct, they changed the full year forecast to $2.85 and $3 per share from $3.20 to $3.40 per share. I am glad that they did this as it was apparent they were going to miss, so better to get it out in the open now. If fuel keeps rising, they won't even make these numbers though.

 

In addition to the concerns you mentioned, airfare is now becoming much more expensive to most destinations. Also extra luggage fees and getting hit with fuel surcharge fees when you fly and then cruise will make cruising not an attractive option to many people who are too far away to drive to ports. This is an extremely rough sector right now.

[hermang]

If I were RC..........I would be very nervous.......at least forward looking. While today's profits are very important, so is the forward statement. I believe they revised down their estimates for the full year, but someone can correct me if I'm wrong, I don't have the release at my fingertips.

 

RC has rolled the dice with freedom and genisis........bottom line if they fill the ships, they will do just fine.

 

Just off the Voyager last week following a b2b...........the second week the ship was 400 passengers short of capacity from the info we recieved. That is a lot of vacancies for one week.

 

If the economy gets worse and people start rethinking vacations......(maybe start taking shorter, closer to home vacations)........and those mega ships don't fill.........the forward outlook may not be as rosey as some loyalists might want to believe. I would think that higher inflation, higher consumer prices and higher fuel costs, plus mega ships that have to be filled, would make me have a second cocktail in the evening if I were ANY cruiseline right now........not just RC.

 

Then again, maybe they know something we don't:)

 

Remember only 17% of the population has ever taken a cruise. what we need is the Loveboat III with Captain Johnny as the star, Richard Spacey as CD, Sudi as the barman - yeah thats the ticket

[Gonzo70]

Some stock analyst who has probably never been on a cruise ship gives a bad rating. Stupid investors bail and the price drops allowing for really smart traders to buy low and sell high..

 

I bought at 20 years ago saw it go to 45 or so - still have it. it is only a loss on paper but I still have a nice profit

 

Actually most of the analysts have a buy or strong buy rating on the stock (and in my opinion some will likely be downgrading the stock in the near future and that may very well pressure the stock price down further); the junk bond status is not what is driving this stock lower it is all the perils of the cruise industry that people have brought up in this thread. A growth stock does not do well when it has decelerating earnings and a pessimistic outlook.

 

As for the "paper" loss, that is a dangerous way to look at it. Whether you hold or not, it is still a loss. You have the chance to get the money back if you hold the stock and it goes back up, but you also have the chance to lose more. If you go to a casino, buy $1,000 worth of chips, and lose $900 of them but don't cash back in the remaining $100 of chips, you have lost $900. You can not say you only have a "paper" loss because you have not yet cashed in your remaining chips. If a stock goes down, you lose money regardless of whether you sell it.

[isujim]

Yes, you are correct, they changed the full year forecast to $2.85 and $3 per share from $3.20 to $3.40 per share. I am glad that they did this as it was apparent they were going to miss, so better to get it out in the open now. If fuel keeps rising, they won't even make these numbers though.

 

In addition to the concerns you mentioned, airfare is now becoming much more expensive to most destinations. Also extra luggage fees and getting hit with fuel surcharge fees when you fly and then cruise will make cruising not an attractive option to many people who are too far away to drive to ports. This is an extremely rough sector right now.

 

Good point on the airfare..........I've been checking today to find some flights for February..........they aren't pretty from what I'm seeing. I'm also glad they revised downward NOW and got it in the open........I'm just not sure they revised it down enough......and as you say........fuel will probably be the one major factor whether they make those numbers or not........I think you'll see another increase in the fuel supplement JMO....within 4 to 5 months.......I don't see anything right now that indicates fuel will be coming down at least before the end of the summer driving season.

[isujim]

Remember only 17% of the population has ever taken a cruise. what we need is the Loveboat III with Captain Johnny as the star, Richard Spacey as CD, Sudi as the barman - yeah thats the ticket

 

I won't dispute your 17% because I don't know and I'm sure you have the right numbers..........and that to me is what RC is counting on........THE NEW FIRST TIME CRUISER to fill these mega ships.

[Gonzo70]

Remember only 17% of the population has ever taken a cruise. what we need is the Loveboat III with Captain Johnny as the star, Richard Spacey as CD, Sudi as the barman - yeah thats the ticket

 

Don't you think the percentage will likely stay the same or drop somewhat in the next couple of years with airfare becoming expensive, cruise prices going up, fuel surcharges on both airfares and cruises, and people on average having less discretionary income? I think in the next couple of years people will start vacationing closer to home more frequently than in the recent past. Places like bed & breakfasts will likely benefit whereas cruise lines will be hurt.

[yogimax]

 

it is only a loss on paper

 

And the loss might be larger next month!

 

At some point the "paper loss" has to be paid for.

[yogimax]

Don't you think the percentage will likely stay the same or drop somewhat in the next couple of years with airfare becoming expensive, cruise prices going up, fuel surcharges on both airfares and cruises, and people on average having less discretionary income? I think in the next couple of years people will start vacationing closer to home more frequently than in the recent past. Places like bed & breakfasts will likely benefit whereas cruise lines will be hurt.

 

The problems are:

 

1. The price of oil - affecting air travel and cruise costs

 

2. Competition

 

3. Over-Capacity

 

Think of the discounting RCCL will have to do to fill their Genesis class ships. At first, people will book them because of the novelty affect. That might last for a year or two. At the same time, however, Freedom and Voyager Class ships will have to be discounted since folks will be booking the "newest". Give it two or three years and RCCL will have to severely discount their Freedom, Voyager and Genesis products.

 

Sorry, but I just don't see a rosy future for any of the cruise lines.

[Cruising89143]

The problems are:

 

1. The price of oil - affecting air travel and cruise costs

 

2. Competition

 

3. Over-Capacity

 

Think of the discounting RCCL will have to do to fill their Genesis class ships. At first, people will book them because of the novelty affect. That might last for a year or two. At the same time, however, Freedom and Voyager Class ships will have to be discounted since folks will be booking the "newest". Give it two or three years and RCCL will have to severely discount their Freedom, Voyager and Genesis products.

 

Sorry, but I just don't see a rosy future for any of the cruise lines.

 

Same thing was said ten years ago when the Voyager came out. The ships were too big. No one will want to cruise on them and on and on. Proved the nay sayers wrong. They will prove them wrong again.