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Royal Caribbean Cruises (RCL) is set to report in-line Q3 results this Thursday due to better cost management. It has had six straight quarters of better-than-expected expenses sans fuel; we expect it to continue. Here are some takeaways from our Gaming, Leisure and Lodging Team on RCL:

·Despite a 6.5% increase in bunker fuel prices since their guidance on July 20, RCL should report in-line 3Q results Thursday due to better cost management

·RCL has had six straight quarters of better than expected expenses ex fuel, and that streak should continue, 2012  guidance should be intact but F4Q may be lowered slightly due to continued pricing weakness in North America (i.e. Caribbean) and higher fuel prices

·But investors may not care much about this fiscal year as all ears will be on Fiscal 2013 commentary

·Bookings continue to be solid and will likely improve in 2013, F1Q 2013 is a difficult comp as yields were up 7% last year with much of the business booked before the Costa Concordia incident

·We’re seeing slightly higher Caribbean pricing YoY for 1H 2013, though it is losing steam recently,69% and 37% of capacity is in the Caribbean for 1Q 2013 and 2Q 2013, respectively

·The recovery in European pricing has been steady

RCL: Cruising Ahead  - image003