Royal Quarterly Results

[Beachammo]

I guess raising prices on cabins and cutting back on cost makes for a fantastic quarter.

 

 

Royal Caribbean's stock surges after earnings beat and raised outlook*

 

Aug 01, 2017 08:17:00 (ET)

 

Shares of Royal Caribbean Cruises Ltd. (RCL) rallied 2.2% in premarket trade Tuesday, after the cruise operator beat second-quarter profit and sales expectations and raised its earnings outlook. The net profit for the quarter to June 30 rose to $369.5 million, or $1.71 a share, from $229.9 million, or $1.06 a share, in the same period a year ago. The FactSet EPS consensus was $1.66. Total revenue increased to $2.20 billion from $2.11 billion, topping the FactSet consensus of $2.19 billion, as better-than-expected passenger ticket revenue offset a miss in onboard and other revenue. Looking ahead, Royal Caribbean expects third-quarter adjusted EPS of $3.45, above the FactSet consensus of $3.29, and raised its 2017 EPS outlook to a range of $7.35 to $7.45 from $7.00 to $7.20. The stock has soared 38% year to date through Monday, while the S&P 500 has gained 10%.

 

 

 

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[xpcdoojk]

Yes, so does a surging stock market, which tends to lift a lot of boats, regardless of how they are performing at the detail level.

 

JC

[Biker19]

Total revenue increased to $2.20 billion from $2.11 billion, topping the FactSet consensus of $2.19 billion, as better-than-expected passenger ticket revenue offset a miss in onboard and other revenue.

Not enough nickel and diming.

[Beachammo]

Yes, so does a surging stock market, which tends to lift a lot of boats, regardless of how they are performing at the detail level.

 

JC

Royal is doing almost 4X the S&P increase.

This "boat" is on top of the wave.

 

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[xpcdoojk]

Royal is doing almost 4X the S&P increase.

This "boat" is on top of the wave.

 

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About time. I have owned the stock for a long time, and lost money for about the first 4 years... now it is up to where it would have equaled a 5% return per year for the last 12 years.... Which is not exactly killing it.

 

JC

[chengkp75]

About time. I have owned the stock for a long time, and lost money for about the first 4 years... now it is up to where it would have equaled a 5% return per year for the last 12 years.... Which is not exactly killing it.

 

JC

 

Yep, to me, "return on investment" (ROI) is more important to how a business is operating than earnings per share, especially in a capital intensive business like ship owning. As you say, you have made 5% over the last 12 years, which is about what a good bond would have provided. Stock price has almost nothing to do with a company's operations, only with the perception of those operations. And investors' infatuation with quarterly earnings is what has made product quality and customer service a thing of the past for nearly all corporations, as they don't look at long term goals of customer retention but focus on what our stock is doing this quarter, and we'll worry about next quarter when it comes.

[Beachammo]

About time. I have owned the stock for a long time, and lost money for about the first 4 years... now it is up to where it would have equaled a 5% return per year for the last 12 years.... Which is not exactly killing it.

 

JC

I bought the stock in December 2013....I'm very happy. Wish i would of bought more at that time.

 

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[lovelife]

Bought 1200 shares many years ago at $8. Woo hoo!!!! Maybe I will splurge for a Star Class suite one of these days.

[datolim]

It is China, China, China for RCCL. 5 year of ground work in Shanghai has paid of. They are killing the local competitor Genting HK. They are reporting a loss of USD200M+.

[LisaAtlCruiser]

My return on investment is sitting at 66.84% - so I am pretty darn happy. However, it is not real money until I sell and I don't plan on doing that at this time. You add in the many times I have been able to get the shareholder benefit of OBC on my cruises and I personally am one happy camper with the stock!

[xpcdoojk]

Bought 1200 shares many years ago at $8. Woo hoo!!!! Maybe I will splurge for a Star Class suite one of these days.

 

Well that is something like 1200 and 100, which if I can do the math, your profit is 120,000. I think you can buy whatever suite you want. I would be petitioning the lazy worthless republican congress to do a capital gains tax change and cashing in your winnings.

 

You all know that the effing North Koreans have nukes and possibly the missles to launch them with.... I love the market and I love America and I love cruising, but one ID10t can screw up all the happy feeling we have with the bulldozer as president.

 

Just saying the bull is awesome when it runs, but the bear is always there lurking. That said I am 90% invested in the market, but the world is crazy...

 

JC

[LMaxwell]

I wonder if they will increase the dividend; they have the past 4 years in the second half of each year.

[Biker19]

Some interesting stuff mentioned by CEO Fain:

 

Today, and in recent interviews, Fain has been citing a societal shift. 'Instead of buying TVs or cars, people are buying memories as never before,' he said, and the cruise sector benefits from that.

The business is performing well across all Royal Caribbean brands and markets, with the 'painful' exception that China pricing is lower this year due to the South Korea travel ban. Even so, Royal Caribbean tallied record China occupancy during the recent quarter.

Fain reported guest satisfaction is at the highest in history, and employee engagement is greater.

The company's 'Double-Double' targets—achieving double-digit return on invested capital and doubling earnings per share within three years, from 2014—had galvanized the entire workforce, he said, adding that RCL will be looking to set new initiatives going forward.

The pricing integrity program instituted in 2015, which rewards customers who book earlier, initially cost some occupancy but the company held the course and now that's producing higher average per diems while occupancy is up, too.

The infrastructure is in place for building on digital tools for marketing, product development and enhancing the consumer experience—a 2.0 program dubbed 'Project Excalibur'—with 15% of the fleet to be implemented within five months of today and half of the fleet by the end of next year. The technology benefits many areas, from offering customers more spending opportunities to helping the crew provide better service. It also yields more data about behavior, improves safety and helps with supply and logistics.

Fain said Symphony of the Seas, coming in 2018, is 'another home run for us, much as Harmony has been.' The benefit of Celebrity Edge, arriving later next year, will flow mainly to 2019.

Summing up, Fain said: 'Demand is good, we're attracting new markets, our employees are happy,' and all of this positions RCL for long-term success.

But since it's unusual that most everything surpasses expectations, the Royal Caribbean chief cautioned analysts that while 2018 looks 'very good,' it's rare that most all things go as well as they have this year.

There's always the worry that uncertainties crop up, and that tempers enthusiasm. 'Not everything goes your way all the time,' Fain said.

[Biker19]

The 15% of the fleet which will get upgraded Excalibur project seems to be Quantum class and Harmony which now have Royal IQ. The half the fleet by end of 2018 he mentioned is probably adding Freedom and Voyager class (and Symphony).

[shibby sails]

Heck, CCL since Sept 2015 is up almost 50%. Its all about when you got in but the cruise lines are killing it lately

[xpcdoojk]

Heck, CCL since Sept 2015 is up almost 50%. Its all about when you got in but the cruise lines are killing it lately

 

Yeah, i own it too, I think it has given a ROI of about 4% a year since I bought, after completely tanking after their power outage cruises a while back. Thank goodness I didn't sell either when they were both tanking...

 

JC

[cruisinfanatic]

About time. I have owned the stock for a long time, and lost money for about the first 4 years... now it is up to where it would have equaled a 5% return per year for the last 12 years.... Which is not exactly killing it.

 

JC

You didn't lose money unless you sold it lower.

Better ck your math. If you owned for 12 yrs and bought at $45, you have made roughly 9% on average per yr not even counting the dividend

[xpcdoojk]

You didn't lose money unless you sold it lower.

Better ck your math. If you owned for 12 yrs and bought at $45, you have made roughly 9% on average per yr not even counting the dividend

 

You need to consider compounded interest. That changes the math considerably. For example when you take out a loan, you are not actually paying a flat interest rate, you are paying a compounded interest rate, works the same way in reverse with investments.

 

So, the math at a 5% interest rate your investment will double in 14.4 years. If you can get a 8% rate of return it will double in 9 years.

 

Simple math rule of thumb, Take the rate of return or interest in the case of a bond or certificate of deposit and take 72 and divide it by that interest rate. So, 72/5 equals 14.4 years

 

All I know because I didn't do the actual math, was I paid about 10 bucks more a share for CCL than I did for RCI when I acquired them sometime back in the 2000s. I don't look very often at share values of the stocks I own because knowing things makes me want to do things, and I prefer to remain ignorant about the value of things I don't want to sell. You forced me to look ,... RCL trading around 115 CCL trading around 67. The Rate of return for me based on this is closer to 1% on CCL. RCL is pretty close to 5 might be pushing 5.5%.

 

You are right about I didn't lose money unless I sold it lower. Except I did lose the opportunity cost of what that money could have earned if it was invested in another way. For example i just did a google search for value of Apple... it was around 10$ in 1987 when I bought my first Mac. Since then with stock splits 1000 shares would now be 56,000 shares today. Plus the stock is going for $157. So, a $10,000 investment in 1987 would not be worth 157 x 56,000 which would be a sickening $8,792,000. I bought a $1000 investment in a stock in 1987 that did tremendously well has a today's value near $70,000. I am a very happy in that investment. I wish I had invested a lot more, because my 10K investment would be worth 700K. Had I bought stock in Apple, and I loved my Mac and I was a Mac evangelist. I wouldn't be working today... Which doesn't even take into account the dividends. On my actual 1987 investment I get a dividend each year equal to my original purchase cost.

 

So, always remember when you spend money on anything including a cruise you have lost whatever else you could have bought with the money.

 

JC

[Baron Barracuda]

About time. I have owned the stock for a long time, and lost money for about the first 4 years... now it is up to where it would have equaled a 5% return per year for the last 12 years.... Which is not exactly killing it.

 

JC

 

12 years ago, end of July 2005, stock traded at $50, today $115. Thats 7.25% compounded growth. Adding in cumulative dividends of roughly $8.50 raises cagr to 7.9%. Thats's a bit better than 5%.

[Baron Barracuda]

The 15% of the fleet which will get upgraded Excalibur project seems to be Quantum class and Harmony which now have Royal IQ. The half the fleet by end of 2018 he mentioned is probably adding Freedom and Voyager class (and Symphony).

 

Am I the only one frightened that Royal is pinning hopes for future on technology. Web site and call centers are abysmal. Saw first-hand how much of the gee-whiz stuff touted on Quantum just didn't work and was later scrapped.

[Biker19]

Saw first-hand how much of the gee-whiz stuff touted on Quantum just didn't work and was later scrapped.

Other than the luggage tracking feature within Royal IQ, what else has been scrapped?

[nelblu]

I'm glad for the results and made a few shekels over the last few days. I just wish that he would concentrate on the web site infrastructure for a better consumer experience.

[nelblu]

Not enough nickel and diming.

 

 

The better than expected results is primarily due to the $7.95 charger for room service.:p

[nelblu]

Well that is something like 1200 and 100, which if I can do the math, your profit is 120,000. I think you can buy whatever suite you want. I would be petitioning the lazy worthless republican congress to do a capital gains tax change and cashing in your winnings.

 

You all know that the effing North Koreans have nukes and possibly the missles to launch them with.... I love the market and I love America and I love cruising, but one ID10t can screw up all the happy feeling we have with the bulldozer as president.

 

Just saying the bull is awesome when it runs, but the bear is always there lurking. That said I am 90% invested in the market, but the world is crazy...

 

JC

 

Not worried about Dem./Rep. Congress as RCL profits are in my 401k.

 

Also, not worried about the Korean mad man as I lived thru the various Russian/Chinese threats, Cuban missile crisis, etc., and one of my all time favorite movie is:

 

 

Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb. Keep in mind a beautiful song to go along with this movie "Don't worry, be Happy.":halo:

[Wine-O]

12 years ago, end of July 2005, stock traded at $50, today $115. Thats 7.25% compounded growth. Adding in cumulative dividends of roughly $8.50 raises cagr to 7.9%. Thats's a bit better than 5%.

 

In 2009 we purchased 100 shares at $16. I thought it would be nice to get the RCI Shareholder credit since we were expecting to do a lot of cruising. A few months later it dropped down to $5, and my wife said that we would purchase more shares at that price -- what the hell does she know. :rolleyes: