What is the financial state of Princess and CCL

[Loreni]

And how does it compare to the rest of the cruise industry? I wonder if any CCL shareholders who have taken the time to evaluate the quarterly reports have an opinion on this. Fuel and food prices have gone up. Is Princess making the same amount of profit as in earlier years? If yes, why the need to risk alienating passengers with room service and Alfredo fees? I know they have a duty to their shareholders to increase profits. But the risk/benefit ratio has to be evaluated. It is not a good idea to risk alienating passengers unless there appeared to be no choice. It seems like a desperate act.

 

Also Celebrity just attempted to devalue its classic drink package. Like Princess, it appears to have been done without warning and seemed like bait-and-switch. It caused and uproar, and like Princess, the decision was rescinded. Again it seemed like an act of desperation. Are things THAT bad in the industry. Or are these just poor management decisions?

Edited May 26, 2014 by Loreni

[Coral]

I think the biggest issue is that all of the main stream cruise lines have built so many ships the past 10 years, that there is so much saturation in the cruise industry. Thus the prices for the cruise itself have gone down so much which then requires the onboard sales to help make up the prices. This is why we are seeing additional charges everywhere.

[hockeygal54]

All I know is I bought CCL less than a year ago for about $31/share, used it for OBC in Jan/March for total of $200 in "tax free dividend" plus the inc in current value of almost $10/share per stock app today. I think that's pretty good deal!

 

 

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[Kenswing]

Look at it for yourself..

 

http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=CCL

 

Year over year, Carnival Corporation has seen net income shrink from $1.3B USD to $1.1B USD despite relatively flat revenues. A key factor has been an increase in the percentage of sales devoted to the cost of goods sold from 66.56% to 67.60%.

Edited May 26, 2014 by Kenswing

[Loreni]

Look at it for yourself..

 

http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=CCL

 

Year over year, Carnival Corporation has seen net income shrink from $1.3B USD to $1.1B USD despite relatively flat revenues. A key factor has been an increase in the percentage of sales devoted to the cost of goods sold from 66.56% to 67.60%.

 

Thank you!

[psujmatt]

I appreciate that the CD has diverse responsibilities. We generally don't participate in many of the activities like Trivia on-board. Up until our most recent cruise, I also didn't understand why some people treat the CD as a make-or-break thing. However, on our most recent cruise (just back yesterday), the cruise director (Joff Eaton on Independence of the Seas) was amazingly funny and energetic, as was the head activities director (Tim Cummings, I believe). We looked forward to the wake up show and his comments/jokes before/after shows. I know this is the Princess board, but I wanted to share that experience. There are still somethings that we think Princess does best!

[cpj]

I'm not sure about there profits but in my Opinion Princess is a well run company compared to Celebrity. Also the passengers are much nicer on Princess. I do think they will be adding more pay venues in the future. NCL on there new ships give you a lot of different places to eat and they have been sucessful with this concept and a lot of the cruise lines will be copying them?in the future. Never thought I would enjoy freestyle and I did not mind paying extra. Also the entertainment was far above anything Princess or Celebrity offers. It was nice to try something different. I also believe they will be marketing there ships to the younger generation in the future. I'm 68 and they have most of us hooked in the perks,and they know that.

[Roses2]

We are very long time CCL stockholders and bought the stock several years ago because it was a well managed company. It remains the largest cruise conglomerate in the world. We continue to buy CCL on dips in price.

 

CCL stock per share for many years was valued higher than RCL. That no longer is true ( CCL - high $30s or low $40s while RCL now tops $50 per share). Some attribute the difference in value to the rough patch CCL had with the loss of the Costa Concordia and the several Carnival mishaps, all of which were very costly and had long term consequences.

 

Over the past year or so, CCL has made several management changes. Some of these involve Princess and HAL. On the surface, CCL remains committed to individual management and identification of each separate cruise line but each line is an integral part of the CCL cruise company.

 

This is just a personal opinion -- nothing more.

[Kartgv]

I appreciate that the CD has diverse responsibilities. We generally don't participate in many of the activities like Trivia on-board. Up until our most recent cruise, I also didn't understand why some people treat the CD as a make-or-break thing. However, on our most recent cruise (just back yesterday), the cruise director (Joff Eaton on Independence of the Seas) was amazingly funny and energetic, as was the head activities director (Tim Cummings, I believe). We looked forward to the wake up show and his comments/jokes before/after shows. I know this is the Princess board, but I wanted to share that experience. There are still somethings that we think Princess does best!

 

It looks like you meant this for somewhere else. This thread has nothing to do with CD responsibilities!

[bdjam]

I think the biggest issue is that all of the main stream cruise lines have built so many ships the past 10 years, that there is so much saturation in the cruise industry. Thus the prices for the cruise itself have gone down so much which then requires the onboard sales to help make up the prices. This is why we are seeing additional charges everywhere.

 

Like

[RickEk]

Here's an interesting comparison of CCL and RCL... Love this site...

 

http://www.wolframalpha.com/input/?i=ccl+vs+rcl

[psujmatt]

I have no idea how that post about about cruise directors ended up in this thread. Sorry!

 

 

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[peety3]

I think the biggest issue is that all of the main stream cruise lines have built so many ships the past 10 years, that there is so much saturation in the cruise industry. Thus the prices for the cruise itself have gone down so much which then requires the onboard sales to help make up the prices. This is why we are seeing additional charges everywhere.

 

It's somewhat of a race to the end, such that if brand X adds new ships, they're (probably) also adding X,000 beds to their inventory, giving them automatic increase in market share. If brand Y doesn't respond with a new/repurposed ship, they take a decrease in market share. Essentially the lines have realized that due to the long build times of a new ship, they have to pre-order early, and then manage their competitive capacity by selling/scrapping their older vessels more dynamically than perhaps first thought.

 

Think of it like an airline: they have to order new planes years in advance (there's a ~7 year backlog for 737s, etc.), so they gamble on it, knowing they can speed up or slow down the tail end of the airplane lifecycle to suit capacity.

[dorisis]

The more mega ships that are built, the more cabins that will have to be filled. The many bad reviews on some of those ships has certainly been 1 factor among many others for the poor showings.

[Coral]

It's somewhat of a race to the end, such that if brand X adds new ships, they're (probably) also adding X,000 beds to their inventory, giving them automatic increase in market share. If brand Y doesn't respond with a new/repurposed ship, they take a decrease in market share. Essentially the lines have realized that due to the long build times of a new ship, they have to pre-order early, and then manage their competitive capacity by selling/scrapping their older vessels more dynamically than perhaps first thought.

 

Think of it like an airline: they have to order new planes years in advance (there's a ~7 year backlog for 737s, etc.), so they gamble on it, knowing they can speed up or slow down the tail end of the airplane lifecycle to suit capacity.

 

The weird thing is that for the most part, there are really only 2 major players in the cruise industry (Carnival Corp and RCCL Parent Company - or whatever they are called). There are smaller fish out there like NCL, Crystal, Regent, etc..).

 

The race seems often within the same company - many of the increases have been within Carnival Corp's brands competing against each other or RCCL competing against Celebrity.

[skynight]

Carnival Corporation shares are currently at around US$40, which is at the high end of the trading range, and follows the current stock market where the indexes are also at their highest. In a recent financial report Carnival reported an over abundance of berths in the traditional Caribbean market, thus placing a downward push on fares. I have not seen any specific Princess related financial data, but can assume that the recent move of Princess ships to the Pacific, Asia and Australia markets is an attempt by Carnival to gain newer customers in less saturated markets with higher fares.

[Roses2]

To be clear, Caribbean Cruises Ltd. fully owns five cruise lines: Royal Caribbean International, Celebrity Cruises, Pullmantur Cruises, Azamara Club Cruises and CDF Croisières de France, plus has a 50% stake in TUI Cruises. So Royal Caribbean does not compete with Celebrity. It owns it.

 

 

Carnival Cruise Lines is by far the largest cruise company. Royal Caribbean is the second largest.

 

Carnival Corporation & plc is a global cruise company and one of the largest vacation companies in the world. The CCL portfolio of leading cruise brands includes Carnival Cruise Lines, Holland America Line, Princess Cruises and Seabourn in North America; P&O Cruises (UK), and Cunard in the United Kingdom; AIDA Cruises in Germany; Costa Cruises in Southern Europe; Iberocruceros in Spain; and P&O Cruises (Australia) in Australia.

 

While there is inter-company competition between and among Carnival brands, Carnival Corporation's major competition is Royal Caribbean Corporation.

 

Stock in CCL includes all of the brands listed above and stock in RCL includes all of its brands.

 

 

Edited May 26, 2014 by Roses2
typo

[Coral]

To be clear, Caribbean Cruises Ltd. fully owns five cruise lines: Royal Caribbean International, Celebrity Cruises, Pullmantur Cruises, Azamara Club Cruises and CDF Croisières de France, plus has a 50% stake in TUI Cruises. So Royal Caribbean does not compete with Celebrity. It owns it.

 

 

Carnival Cruise Lines is by far the largest cruise company. Royal Caribbean is the second largest.

 

Carnival Corporation & plc is a global cruise company and one of the largest vacation companies in the world. The CCL portfolio of leading cruise brands includes Carnival Cruise Lines, Holland America Line, Princess Cruises and Seabourn in North America; P&O Cruises (UK), and Cunard in the United Kingdom; AIDA Cruises in Germany; Costa Cruises in Southern Europe; Iberocruceros in Spain; and P&O Cruises (Australia) in Australia.

 

While there is inter-company competition between and among Carnival brands, Carnival Corporation's major competition is Royal Caribbean Corporation.

 

Stock in CCL includes all of the brands listed above and stock in RCL includes all of its brands.

 

 

 

Thanks - I wasn't clear what RCCL's parent company was called.

 

Though - I think a lot of competition is within a company. RCCL cruisers go back and fourth between RCCL and Celebrity. Princess cruises often go back and fourth between Princess and HAL. I see more competition within a company as opposed to against a company. Regardless, there are 2 major companies and both have drastically increased their births the past 10 years.

[Posaune]

Yahoo Finance analyst ratings-

2 Strong Buy

7 Buy

10 Hold

1 Underperform

1 Sell

[caribill]

See this thread http://boards.cruisecritic.com/showthread.php?t=2014648 for recent information about CCL corp

[Coral]

See this thread http://boards.cruisecritic.com/showthread.php?t=2014648 for recent information about CCL corp

 

Reading this prompted me think about the Princess commercials - I haven't seen them in awhile! Sorry, wasn't a fan.

[billco]

I don't know the financial state, but three years ago I bought 100 shares for about $3200. The shares are worth $4,058 now. I also have received $300 in quarterly dividends. I have also received about $1200 in OBC. I'm ok with that.

[Kenswing]

I don't know the financial state, but three years ago I bought 100 shares for about $3200. The shares are worth $4,058 now. I also have received $300 in quarterly dividends. I have also received about $1200 in OBC. I'm ok with that.

And as a bonus that OBC is tax free.. :D

[swedish weave]

Takea look at the debt equity ratio of the three major players in the cruise industry. Carnival has a much lower debt equity ratio than NCL or RCCL.

 

That tells me that CCL doesn't pay as much interest on debt as the other two, so is in better position to weather the rough spots in the cruising industry.

Edited May 27, 2014 by swedish weave

[bluesea321]

As I mentioned on another post, Princess is owned by CCL and CCL stock has underperformed the market by a wide margin over both a 5 and 10 year period - it has been a bad investment. In the first quarter of 2014 CCL had no profits, actually a loss of 2 cents per share. Revenues for the 1st Q were in line with the previous year so the loss is attributed to increased expenses. If we look at a 10 year period, CCL stock increased from $33.22 on 5/28/04 to today's price (10 am CDT) of $39.31 or 18% over 10 years. This compares with a 70% increase for the SP500 over the same 10 years. Stockholders cannot be happy over this. From the outside it is difficult or impossible to discern the profitability of each of the CCL cruise lines individually but no doubt Princess is looking at ways to increase revenues.

 

The following are two links regarding costs/performance. The first one relates to a $400 million expense to add scrubbers. The second one has to do with the Asian market.

 

http://www.latimes.com/business/la-fi-carnival-400-million-cruise-ship-pollution-20140522-story.html

 

http://www.businessweek.com/articles/2014-05-22/in-china-cruise-lines-hope-to-woo-millions-of-first-time-guests?campaign_id=yhoo