RCL stock today

[Beachin2]

The street certainly doesn't like the "downward" guidance issued this morning.

 

You can only nickel & dime so much before it shows.

 

Bad strategy in play IMHO. YMMV.

[Susie51]

Thanks for sharing.

[CVU]

http://www.******************.com/2015/04/20/royal-caribbean-reports-stronger-expected-first-quarter-earnings

 

Royal Caribbean reported its 2015 first quarter earnings today that came in notably higher than expected.

 

Royal Caribbean's adjusted net income was $45.2 million, or $0.20 per share, versus a forecast of $0.10 to $0.15 per share. Results were approximately $0.08 better than the mid-point of guidance, despite a $0.05 currency and fuel headwind.

 

Overall booking volumes during the first quarter were higher than prior year levels even after adjusting for an increase in capacity. Caribbean itineraries enjoyed particularly strong demand, and bookings were also up year-over-year for Europe and China itineraries.

 

More recently, Royal Caribbean has taken further steps to improve the integrity of its pricing model including steps to eliminate last minute discounting.

 

European itineraries in general are booked at a higher load factor than last year. Western Mediterranean itineraries have been booking well, while trends have been a little weaker for Eastern Mediterranean itineraries, particularly those that turn in Turkey.

 

Demand for China remains strong and bookings have been outpacing expectations despite the significant capacity growth in the region.

[awestover89]

The street certainly doesn't like the "downward" guidance issued this morning.

 

You can only nickel & dime so much before it shows.

 

Bad strategy in play IMHO. YMMV.

 

Actually, the analyst recommendations don't have anything to do with "nickel and diming" but a stronger USD resulting in a lowered forecast of "the purchasing power of guests from abroad" for on board purchases, as well as higher fuel costs.

 

Their reports weren't really that troubling, I'm surprised to see how heavily it dropped due to the fear mongering. I'm actually thinking of grabbing a few more shares now that it's dropped so rapidly.

[CVU]

The web site won't show if I post it but here is some info, as of today........

 

(Reuters) - Royal Caribbean Cruises Ltd cut its adjusted profit forecast for the year, citing a jump in fuel prices since January and a strong dollar.

 

Shares of the world's second-largest cruise operator by revenue, which also reported lower-than-expected quarterly revenue, fell 7.6 percent in premarket trading.

 

The company said on Monday that it now expects adjusted profit of $4.45-$4.65 per share for the year ending December, lower than its January forecast of $4.65-$4.85.

 

The forecast includes a 36 cents per share impact from a strong dollar and a rise in fuel prices, the company said.

 

Royal Caribbean said it now expects fuel expenses of $834 million based on current prices, up from its previous forecast of $806 million.

 

Brent crude, the global benchmark for crude oil prices, has risen 36 percent from mid-January to close at $63.45 per barrel on Friday.

 

The company's first-quarter revenue missed analysts' estimates as a strong dollar crimped onboard purchases by customers from outside the United States.

The dollar gained nearly 9 percent against a basket of major currencies in the first quarter after rising 13 percent in 2014.

 

Royal Caribbean's net yield in the first quarter ended March 31 was down 5.4 percent on a reported basis.

 

Lower cruise operating expenses boosted the company's net income to $45.2 million, or 20 cents per share, from $26.5 million, or 12 cents per share, a year earlier.

 

Revenue fell 3.7 percent to $1.82 billion.

 

Analysts on average expected a profit of 13 cents per share on revenue of $1.86 billion, according to Thomson Reuters I/B/E/S.

 

Royal Caribbean's shares fell to $73 in premarket trading. Up to Friday's close of $79.03, the shares had risen 54.6 percent in the past 12 months.

 

Shares of larger rival Carnival Corp also fell 2 percent to $46.01 in premarket trading.

[Lady Hudson]

Just an FYI -- maybe it is meaningless. I caught the tail end of a business show this weekend. The analyst was telling folks to steer clear of RCI stock. He was suggesting that the stock will go down. Sorry I didn't hear the entire report.

[MrMileStoner]

Earnings may be higher than expected, but earnings still declined 4.8% year over year and total revenue decreased 3.8% year over year. Total revenue also missed the consensus estimate.

 

Passenger ticket revenues down about 3.1% year over year and onboard and other revenues declined 5.6% year over year.

 

Zacks has a sell ranking on RCL.

[WhenIsLobsterNight]

I lost a boat load (pun intended) today at this stock. I had a nice run with this stock the past few years and am closing out my entire position today that is substantial. 12 months ago this message board was glowing toward RCCL. These days though, this board is toxic toward this company. They are ticking off their core loyal customers to make a quick buck. I do not see how this stock is a good investment over the next few years and anticipate I will be able to buy it 20-35% cheaper in a few years if I so choose to do.

[awestover89]

Earnings may be higher than expected, but earnings still declined 4.8% year over year and total revenue decreased 3.8% year over year. Total revenue also missed the consensus estimate.

 

Passenger ticket revenues down about 3.1% year over year and onboard and other revenues declined 5.6% year over year.

 

Zacks has a sell ranking on RCL.

 

I'm always skeptical of the professional rankings. The best stock in my portfolio came from a professional recommendation, but so have the three that have performed the worst. Aside from my best position, all of my stocks that have doubled since I bought them were not highly recommended by any of the professionals.

 

RCL is a bit volatile for my tastes, but I still feel that the massive sell-off this morning was hasty. I grabbed a few more shares for my portfolio once I saw the selling had died down a bit, and it's up 50 cents a share since then. Long term this might prove to be a mistake on my part, but I've got a feeling it will rebound.

 

Still, lost a decent bit from the shares I owned before this morning. That's the stock market for you though.

[Beachin2]

I'll stand by my original post. The trend is not favorable right now. One factor cited was increased fuel costs. Look at fuel costs at the same point last year versus this year. That's not a driver for this year.

 

Yes, the dollar hurts some in the conversion. So does the outlandish prices I regularly read of advertised on the UK site or the $12 simple bar cocktail. Those definitely effect bookings and revenue.

 

Quarter to quarter earnings ARE being negatively impacted by recent efforts to increase the margin just a bit too far IMHO.

 

Just my 2 pennies worth.

[JKrise]

RCL stock price is still dropping.

Yesterday dropped $1.55 per share.

Today price is at $66.75.

 

How much lower?

[awestover89]

RCL stock price is still dropping.

Yesterday dropped $1.55 per share.

Today price is at $66.75.

 

How much lower?

 

I doubled my holdings at $68, so I'm clearly not the right person to speculate on this :( Long term I'm still expecting it to rise back up but *shrug*

[JKrise]

Just checked Zacks...RCL still rated as a 'SELL'.

Looks like Zacks was correct.

[JKrise]

Hmmm...

Debt-to Equity ratio:

 

RCL = .94 :eek:

CCL = .3

 

With a high debt/equity ratio generally indicating that a company has been aggressive in financing its growth with debt, earnings may suffer.

[wolfcathorse]

I'm still thrilled RCI is trading in the $60's...I bought when it was $8.

[Paul65]

Hmmm...

Debt-to Equity ratio:

 

RCL = .94 :eek:

CCL = .3

 

With a high debt/equity ratio generally indicating that a company has been aggressive in financing its growth with debt, earnings may suffer.

 

A debt to equity of .94 is not a bad number at all. I think average for US companies is closer to 1.5 or so. And a very low debt to equity is not always a good thing. For cruise companies, for example, it could be an indicator that the company is not investing in growth. If you're not building new ships, you could keep your debt down, but eventually, your fleet is old, and you lose market share. (I'm not suggesting that's the case with CCL; just pointing out that a lower debt ratio isn't always a positive sign.)

[cavydad]

I have already recouped my investment in 100 shares of RCL stock in cruise credits on Celebrity and Royal ships. I purchased it for $20 per share and adding in the annual dividends it has been a moneymaker.

 

Just don't micro manage the RCL stock and don't cry over every comment by the stock commentators.

[setsail]

Hmmm...

Debt-to Equity ratio:

 

RCL = .94 :eek:

CCL = .3

 

With a high debt/equity ratio generally indicating that a company has been aggressive in financing its growth with debt, earnings may suffer.

 

The debt is great and pays very good:D

 

http://www.nasdaq.com/symbol/rcl/analyst-research

[JKrise]

..and from ZACKs..

Debt is bad...

 

http://www.zacks.com/stock/quote/RCL?q=rcl

[orville99]

..and from ZACKs..

Debt is bad...

 

http://www.zacks.com/stock/quote/RCL?q=rcl

 

Which is probably a good reason not to use zacks for any substantive financial analysis.

 

Debt is a fundamental driver of growth and profitability as it provides leverage to increase the slope of the revenue/cost line. A company without debt is a company without a future.

 

BTW, .94 is neither good nor bad. Debt ratios should only be viewed in the context of the industry in which the company participates. An LTD ratio of .94 in an industry with an average LTD ratio of 2 has a completely different meaning than an LTD ratio of .94 in an industry with an LTD ratio of .2.

[JKrise]

A debt to equity of .94 is not a bad number at all. I think average for US companies is closer to 1.5 or so. And a very low debt to equity is not always a good thing. For cruise companies, for example, it could be an indicator that the company is not investing in growth. If you're not building new ships, you could keep your debt down, but eventually, your fleet is old, and you lose market share. (I'm not suggesting that's the case with CCL; just pointing out that a lower debt ratio isn't always a positive sign.)

 

 

Good point.

So your ideas regarding the recent drop in share price?

[Paul65]

Good point.

So your ideas regarding the recent drop in share price?

 

Well, it's mostly because they revised their earnings guidance for the year downward. RCI attributed the revision mostly to currency conversion factors (strong dollar, with lots of overseas revenue, means lower earnings in terms of dollars).

 

I don't follow it closely enough to comment on whether or not the strong dollar really explains most of the difference or not.

[RDC1]

Well, it's mostly because they revised their earnings guidance for the year downward. RCI attributed the revision mostly to currency conversion factors (strong dollar, with lots of overseas revenue, means lower earnings in terms of dollars).

 

I don't follow it closely enough to comment on whether or not the strong dollar really explains most of the difference or not.

 

While the strong dollar negatively impacted the revenue line, it actually yielded a greater benefit to the expense side of the ledger.

 

Best way to look at it is to compare the 10Q reports of CCL and RCL both being in the same business and should be impacted similarly by the strong dollar and fuel costs.