Wall St Punishing RCL Stock

[dirtymoney]

RCL reported earnings this morning and the stock is now down over 10%

 

http://www.thestreet.com/story/13444087/1/royal-caribbean-rcl-stock-drops-on-lower-than-expected-guidance.html?puc=yahoo&cm_ven=YAHOO

[dirtymoney]

RCL reported earnings this morning and the stock is now down over 10%

 

http://www.thestreet.com/story/13444087/1/royal-caribbean-rcl-stock-drops-on-lower-than-expected-guidance.html?puc=yahoo&cm_ven=YAHOO

 

The stock is now down over 17% and now trading at $69.00

 

Celebrity soon to charge for tap water:eek:

[villauk]

The stock is now down over 17% and now trading at $69.00

 

Celebrity soon to charge for tap water:eek:

 

Afraid to tell you, but you already do: it's incorporated into your cruise price ;).

[grandgeezer]

Stock prices are not based on what your profits are now but what they will be in the future. It's pretty obvious that the money managers think that if this is the best they can do now with low fuel prices and high profits on onboard prices, what is going to happen when fuel prices rise and people finally realize that onboard products aren't worth the current pricing? Watch for prices on cruises to go up along with drink prices, specialty restaurants, etc, in an attempt to appease shareholders, which, I think, will drive away more customers.

I follow two investment strategy sites and one downgraded RCL to a hold, and the other one to a sell. These sites have helped me make a ton of money over the years so, in most cases, I believe most of what they say. I don't currently own or plan on buying any RCL stock as I invest to make money quickly, not spin my wheels for years until it finally decides to do something positive.

[jsf]

The stock is now down over 17% and now trading at $69.00

 

Celebrity soon to charge for tap water:eek:

 

Or they could install Pay Toilets

J.

[iancal]

Jukeboxes in the lounge.

 

Automats in the buffet area and on each deck near the cabins.

[dandee2]

Paddles??

 

Please stop giving them idea:)

[cruise47]

They are going to start charging for using their gang planks.

[Big Chief]

Rumors abound about the following potential revenue streams....

 

Lounge Chair Rental fee (Free for Suite Passengers)

Baggage Fee (waived for Zenith Members)

Elevator Use Fee (or purchase Elevator Package)

Enter/Leave ship Fee (rumored to be $1 USD)

$25 Cruise Booking Fee ($50 if booked over telephone with a live agent)

[mandream]

Rumors abound about the following potential revenue streams....

 

Lounge Chair Rental fee (Free for Suite Passengers)

Baggage Fee (waived for Zenith Members)

Elevator Use Fee (or purchase Elevator Package)

Enter/Leave ship Fee (rumored to be $1 USD)

$25 Cruise Booking Fee ($50 if booked over telephone with a live agent)

 

If I refuse to pay the $1 to leave the ship, does that mean I get to stay on for the next cruise?

[mcrcruiser]

Volatility is the in word today in this stock market . Cruise line stocks are in the non needed or essential to life arena .Thus ,they are sure to loose stock value in this contracting economic downturn :eek:.JMHO

[rmalbers]

I heard they are going to start having a daily 'resort fee'. It will cover the use of the pool towels and loungers. Also ice water in the pool area only.

[ghstudio]

Why is anyone shocked. Celebrity has been offering bookings with a $25 deposit....obviously to try to get bookings so they can say "bookings are firm". We have terrorism issues, disease issues, immigrant/refugee issues, ISIS, strikes around the world. The stock market is significantly down and even folks who are financially well off psychologically feel poorer and maybe cancel or don't take that cruise....and rather visit the family. The only thing holding the cruise industry together right now is the price of oil. Celebrity is building two new ships with very cheap money...but they are going to fill them profitably...and thoughts of putting them in China or the Far East may not look so rosy right now...so where do they need the capacity...and those ships are likely geared towards the suite, higher end guests and there is lots of competition in that space now....they just make it worse. Did I mention the ad campaign that's aimed at perhaps the wrong people...the ones who might be pregnant, etc. Those folks don't fill the ships...it's their normal demographic that do....the older and retired...the ones they seem not to care about all that much.

 

If you ignore anything they said when releasing numbers, look at the world situation and ask...how are they going to increase their profit...especially when oil prices start to go up again (and that's going to happen).

 

No...they aren't going to be able to continue to raise prices...they are already hurting this summer....many unsold cabins and growing as final payment looms. They might, perish the thought, even have to offer significant discounts in the 30-45 days before the cruise.....which , of course, they said they were not going to do.

 

It's not a rosy picture for stockholders...and it may become more rosy for those of us that still cruise....who knows what the next offer will be?

Edited February 2, 2016 by ghstudio

[grandgeezer]

Great post, I agree and understand everything you commented on.

 

For me, it's not all about the money, it's about the experience. I would be more than happy to pay more if they would go back to the cruising experience of say five years ago when cruising was something special. As is, it's not anything special and price drops won't make it anymore appealing. Don't tell me to go to the high end lines to get it because we really loved Celebrity as we've averaged over 40 days at sea, a year, for the last five years. Our choice is Celebrity or bust and as the way it is now, bust is winning. We are resigned to the fact that this won't happen, but life goes on and we'll find other types of vacation activities to spend our hard earned money on.

[jwc1027]

Richard Fain, CEO, came on CNBC and attempted to defend stock and appeared dismayed (shocked) that stock was taken out to woodshed. He reiterated that earnings were good for 2016 and 2017. As others have noted there are some geo-political factors out of their control but RCL does hedge their oil positions so currently that is not as big a concern as one might think.

Obviously today's tape was bad to start but sell off in RCL does seem over done. Only time will tell.

JWC

[wwcruisers]

Volatility is the in word today in this stock market . Cruise line stocks are in the non needed or essential to life arena .Thus ,they are sure to loose stock value in this contracting economic downturn :eek:.JMHO

 

Thank you, Cliff! People forget that RCCL is purely a "travel & leisure" stock, and as such, is likely to be the first to tank (and the last to recover) in a true bear market -- which we may or may not be approaching.

[ghstudio]

Richard Fain, CEO, came on CNBC and attempted to defend stock and appeared dismayed (shocked) that stock was taken out to woodshed. He reiterated that earnings were good for 2016 and 2017.

 

Earnings will be good if people fill their ships (how many low offers have you received in the past week for cruises in March/April...and Europe during 2016?) and the bookings actually become final payments.

 

No one, including RCL/Celebrity, knows the quality of their bookings (I certainly would discount them a fair amount, especially any booked with only $25). Empty cabins are a "green eyeshades" disaster.....it's hard to make any on-board revenue from non-passengers. Unlike the airlines, the cruise lines can't just limit capacity to keep prices high....three new ships at RCL this year...panic!! two for Celebrity in 2018/19....worry!! They have already saved people cost on board...can't cut that much more. Food costs are level...I guess that's positive (for us), can they raise prices more on specialty restaurants, drinks,..... I think they're pretty much topped out. Can they really put in pay toilets, etc....no..that would be the kiss of death. Can they cut their advertising budget...well, given the current advertising push, I'd say yes...but I am suddenly seeing many cruise lines advertising on TV...they're all hurting.

 

People need to stop listening to the "talking heads" on TV and listening to financial radio.....turn that off and think about the product and the company just using common sense. If you think it's a good investment, go for it. I suspect that the price drop is many selling who think they can invest their money somewhere else for a better return in at least the short/medium term.

Edited February 2, 2016 by ghstudio

[jb008]

Looking at prices and offerings, I'm pretty unimpressed for 2017, I'm holding 3 refundable bookings but unlikely to convert any of them at the prices (and itinerary) beings offered. I wouldn't trust future booking numbers too much, esp. with the $100 and $25 deposits being offered nowadays.

 

There's not that many companies in the space, so collaboration would be a no-no, but some discipline on capacity is really needed. I think the ship within a ship concept might help monetize certain aspects of cruising, and help broaden "premium luxury" appeal a little, but I'm not convinced the market will support the capacity. Especially with the stock market continues to punish boomers' retirement savings, making it harder to afford travel during retirement. I also don't think the boomer population retirement financials supports a huge surge in discretionary spending once they retire. A major investment thesis for leisure and discretionary services.

[MicCanberra]

If it gets down to $20, I am buying.:cool:

[ghstudio]

On a positive note, some were wondering if RCL would raise their dividend yield in 2015. Today, With the help of the stock market their dividend is now over 2%.

[98Charlie]

If it gets down to $20, I am buying.:cool:

Could happen. But the last time RCL was that low was in the fun of '08.

 

Even with today's nose dive RCl is up nearly 50% in the past 2 years.

 

It may well be a fork in the road for the company. They can fill the ships with a reduced fare (and watered down product) or try to fill the niche between mass market and luxury lines.

 

That's my 1¢ worth. (It was my 2¢ a while ago but it's taken a beating too:p)

 

Charlie

[MicCanberra]

Could happen. But the last time RCL was that low was in the fun of '08.

 

Even with today's nose dive RCl is up nearly 50% in the past 2 years.

 

It may well be a fork in the road for the company. They can fill the ships with a reduced fare (and watered down product) or try to fill the niche between mass market and luxury lines.

 

That's my 1¢ worth. (It was my 2¢ a while ago but it's taken a beating too:p)

 

Charlie

Lol, funny.

 

 

I really don't see them filling that gap between luxury and mass market any differently to what they already have with the various lines (Azamara, X and RCI).

[gimletgal]

This from the South Florida Business Journal:

 

"The company remains steadfast on its policy to end last-minute discounts on cruises. In December, Fain said, the company implemented a blanket policy that eliminates discounts 30 days before the sailing date, except on 3- to 4-day cruises. The company first employed a similar policy last year, but has since simplified it. Before, the discount time window varied from 10 days to 40 days before the embarkation date."

 

Well, if this statement is true, why are the Xciting Deals pages filled with discounts for cruises as far out as April 11th (69 days) and most (10 out of 11) for 7 - 15 nights!?

 

Perhaps an overabundance of unfilled staterooms???? :confused:

[The_Big_M]

This from the South Florida Business Journal:

 

"The company remains steadfast on its policy to end last-minute discounts on cruises. In December, Fain said, the company implemented a blanket policy that eliminates discounts 30 days before the sailing date, except on 3- to 4-day cruises. The company first employed a similar policy last year, but has since simplified it. Before, the discount time window varied from 10 days to 40 days before the embarkation date."

 

Well, if this statement is true, why are the Xciting Deals pages filled with discounts for cruises as far out as April 11th (69 days) and most (10 out of 11) for 7 - 15 nights!?

 

Perhaps an overabundance of unfilled staterooms???? :confused:

 

1) it's a misquote and 2) the example doesn't contradict the quote.

 

The point was no further discounting after that point (with other exceptions) so there will be definitely be discounts 69 days out, and even 30 and less days out.

[Cruise Junky]

This from the South Florida Business Journal:

 

"The company remains steadfast on its policy to end last-minute discounts on cruises. In December, Fain said, the company implemented a blanket policy that eliminates discounts 30 days before the sailing date, except on 3- to 4-day cruises. The company first employed a similar policy last year, but has since simplified it. Before, the discount time window varied from 10 days to 40 days before the embarkation date."

 

Well, if this statement is true, why are the Xciting Deals pages filled with discounts for cruises as far out as April 11th (69 days) and most (10 out of 11) for 7 - 15 nights!?

 

Perhaps an overabundance of unfilled staterooms???? :confused:

 

He was referring to RCL not X or Azamara. Which doesn't explain why I was seeing some sub $600 Transatlantics on RCL today ;)

Edited February 3, 2016 by Cruise Junky