In-line 1Q but will RCL change FY 2012 guidance?
We’re projecting an in-line 1Q at 14 cents. Close-in bookings for Q1 were weak but it shouldn’t have much effect on results since there was very little unsold inventory left at the time of the last call. 1Q fuel expenses are estimated to be $8MM higher since its latest guidance update on Feb 29. The big question is whether RCL will follow CCL and lower FY2012 guidance again. As RCL mentioned on their last call, 2Q and 3Q is highly uncertain. We’ve have lowered 2Q and 3Q estimates due to weak pricing across most itineraries as we mentioned in "2012 MARCH CRUISE PRICING MATRIX" (4/18/2012). However, 4Q is looking healthy due to strength in the Caribbean business. Our current FY 2012 estimate is $2.01, which is lower than the Street’s $2.16, but still within the $1.90-$2.30 set forth by RCL.
No change in guidance or only a small tweak lower would be a positive for the stock. Since RCL lowered guidance on 02/02/12, the stock is down 3% while the S&P is up 5%.
