In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance.
Overall, RCL was in-line with our expectations even though guidance was lowered. This should've been expected. Here is the report card evaluating actual results against management's assertions.
- WORSE – 1Q came in at the high end of guidance. Midpoint FY 2012 EPS guidance was lowered by 15 cents. FY 2012 constant currency yield guidance was lowered by 1% on the high end to 1-4
- SLOW BOOKINGS IMPROVEMENT
- SAME – slow and steady improvement from Costa Concordia incident. Cumulative bookings since early February are down mid-single digits. During the 4Q call, RCL mentioned new reservations dropped in the low-to-mid teens. North America bookings are improving at a faster pace than European bookings.
- PRICING REDUCTIONS
- BETTER – More normal revenue management environment than 3 months ago
- LEVEL OF UNCERTAINTY
- SAME – European summer itineraries continue to cloud the outlook but consistent with expectations
- US MARKET STRENGTH
- BETTER – Expect Caribbean yields to surpass 2008 level
- EUROPE WOES
- SAME – Cruise sales and pricing remain very weak. Good performance from the Pullmantur tour groups lessens the blow a bit
- ASIA/SOUTH AMERICA
- SAME– Australia and Brazil continue to be robust markets. Voyager of the Seas is generating some interest out of Asia
- COST STRUCTURE
- WORSE– Even though FY2012 fuel expenses were only $2MM higher than previous guidance higher drydock, maintance, and tour-related expenses drove up NCC ex fuel guidance by 1% point.
- RELUCTANCE OF NEW CRUISERS TO BOOK
- SAME – Still wary of booking