• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.


"Booking trends have continued to improve for both our North American and European brands, particularly for our peak summer season. We are optimistic these positive trends are an indicator of a strong wave season, our heaviest booking period which begins in early January. Given the recent cold weather and snow, particularly in the Northern U.S. and Europe, there is no better time to book a cruise vacation." 

- Micky Arison, Carnival Corporation & plc Chairman and CEO


  • 4Q2010 results:
    • Constant dollar net revenue yields: +3.9% (vs.  guidance of 2.5-3.5%)
    • Gross revenue yields: +1.5%
    • Net cruise costs (ex. fuel): -1.1% (constant $)
    • Gross cruise costs: +0.8%
    • Fuel: +6% to $488/metric ton (YoY) (vs. guidance of $479)
  • "Since last September, booking volumes continued to be strong and prices for those bookings are higher than last year. At this point in time, cumulative advance bookings for 2011 are at higher prices with slightly lower occupancies versus last year.  Based on these booking trends, the company forecasts a 3 to 4 percent increase in constant dollar net revenue yields for the full year 2011."
  • FY2011 Guidance:
    • Net revenue yields (constant dollars): +3-4%
    • Net cruise costs (constant dollars): +1.0-2.0%
    • Net cruise costs, ex fuel (constant dollars): -0.5% to +0.5%
    • Fuel: +$134MM ($527/metric ton) YoY ($0.17/share) which should be partly offset by favorable currency movements ($0.04)
    • Fuel Consumption: 3,450
    • EPS: $2.90 - $3.10
    • Cash from ops: > $4BN; while capital commitments decrease to $2.6BN
    • "We expect to generate significant free cash flow in 2011 and beyond, which should provide us ample opportunities to return additional cash to shareholders over time."   
  • 1Q2011 Guidance:
    • Constant dollar net revenue yields: +1.5 - 2.5%
    • Net cruise costs (ex. fuel): +3-4% (constant $)
    • Net cruise costs (ex. fuel): +3.5-4.5% (constant $)
    • Fuel: $526/metric ton and consumption of 835 tons


  • Higher revenue yields and favorable currency impact each contributed 2 cents to the outperformance in the quarter
  • North American yields saw improvements across the board ex Caribbean pricing which was flat
  • European brands outperformed
  • Net onboard and other revenue yields increased 2% in both North America and Europe
  • The stronger dollar also impacted EPS by 3 cents a share; adding fuel and disruptions, the total impact was $0.13
  • In the future they will report results by the North American Brands and all other brands. 
  • 2011 impact of fuel and currency:
    • 10% change in fuel = $180MM
    • 10% move in FX = $194MM or $0.24
  • Fleet-wide capacity will increase 2.8% in NA and 9.8% internationally (EAA); total is 5.2%
  • They are planning a dividend increase and will make the announcement after board meeting in mid-Jan
  • Bookings QTD have been solid with local ticket pricing running higher
    • Slightly higher in NA (nicely higher ex Caribbean)
    • EAA brands is also higher YoY
  • Top-line revenue guidance of ~9% in 2011
  • 1Q guidance:
    • Capacity: 5.1% higher; 10.8% EAA and 1.7% in NA
    • Higher local currency pricing and flat occupancy
    • Last minute pricing on the first quarter bookings has been strong
    • Only have a small amount of inventory to be sold
    • NA brands: 67% in Caribbean (up from 62% in 2010)
    • Winter Caribbean pricing is slightly lower while Mexican Riviera pricing is slightly higher
    • Pricing at the current time in NA is same as last year
    • EAA brands: 22% in Caribbean, 16% in S. America.  Ticket prices in local currencies are nicely higher YoY on higher occupancy
    • EPS: $0.15-0.19 / share
  • 2Q 2011 Guidance: 
    • Capacity increase: 4.8% fleet-wide; 8.6% EAA and 2.5% in NA
    • Occupancies slightly lower; local prices higher
    • NA: 55% in Caribbean
    • Pricing for NA brands is higher with occupancies slightly lower
    • Caribbean is slightly lower YoY but better than 1Q
    • EAA brands: 55% in Europe
    • Local currency EAA pricing are running slightly ahead but occupancies are a little lower
    • Fleet-wide local currency yields forecast to be up sequentially
  • 3Q2011:
    • 5% increase in capacity: 3.6% in NA and 7.2% in EAA
    • Early indications are that pricing is up nicely with slightly lower occupancy
    • NA: 36% in Caribbean, 25% Europe, and 23% in Alaska
    • EAA brand capacity: 88% in EAA itineraries
    • Still a lot of inventory left to be sold - and much of the results will depend on the strength of wave season


  • No fuel surcharges any time soon
  • Newer ships are 20% more efficient on fuel consumption than older ships
  • Capacity growth in 2011 and 2012--industry wide is about 5%
  • Combined cruise segment they are going to break into 3 segments - the 3rd is the corporate office and a couple of cruise facilities that they own and operate which will be in cruise support
  • Booking pace has stayed the same over the last few weeks. They anticipate that the recent cold weather will help their wave bookings but not seeing any impact right now.
  • See their capacity growing 2-3 ships per year in the intermediate future
  • Dividend: post financial crisis, their board has become more conservative
  • Looking for about 2.5% increase in onboard and other revenue spend - with increases throughout the year as the consumer recovers but they are also adding more onboard features to encourage increased spend
  • Caribbean is holding its own and seems to be getting sequentially better in 2Q2011 vs. 1Q2011
  • FX is weighted a little more than 2/3rds towards the Euro than the GBP
  • The recovery potential for premium is a little greater than for the contemporary brands
  • Norwegian has invested a lot more money in their direct sales program than CCL - their business is so much larger and more diversified that it's not really apples to apples
  • By the middle of 09', the booking window came back to close to historic levels and hasn't really changed. They will never get too far ahead or behind because they would just adjust their yields. No major changes in cancellations.
  • Visibility for next year is very similar to last year
  • South America is doing very well this year after the massive capacity additions last year