RCL 1Q2012 REPORT CARD

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. 

  • GUIDANCE
    • 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

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