RCL 3Q 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

 

 

RCL 3Q REPORT CARD - rcll

 

OVERALL

  • BETTER:  The strength of the close-in pricing and bookings was a big surprise in Q3.  Prudent cost management also helped.  While management did not want to provide any concrete 2013 guidance, their outlook is much more optimistic than the past couple of quarters.

 

CLOSE-IN VOLUMES

  • MUCH BETTER:  Significant close-in demand across all markets, including Europe, catapulted RCL to an impressive Q3 beat.
  • PREVIOUSLY:  "What we see is that we are in fact able to drive the late business at good volumes. Clearly not at the rates we would like to be commanding for these products, but we are able to drive the business. So that is coming from actually all European source markets....Volumes essentially will need to be higher on a year-over-year basis, the close-in volumes, because we have a larger capacity hole to fill in Europe because of the way that the market developed this year....and at this point, I can say that we are finding that."

BOOKING TRENDS

  • SLIGHTLY BETTER:  the booking environment has stabilized in general.  North America and Northern Europe are on a normalized booking curve while Southern Europe booking remain "closer-in" than seen historically. 
  • PREVIOUSLY:  "Over the past couple of months, bookings have been running slightly ahead of this time last year from both Europe and North America. We have seen a shift to a closer in booking window in key European source markets, particularly those in Southern Europe. The booking window for North America and most other non-European countries is largely the same as it was at this time last year."

4Q LOAD FACTOR/APD 

  • WORSE:  Load factor is trailing that of last year.  RCL mentioned a ship in Asia scheduled in early October that has only filled 60% of capacity due to the tensions between China and Japan.  It is one reason why 4Q yields on a constant-currency basis was lowered by 1%.
  • PREVIOUSLY:  "The fourth quarter is yet another story... as of the time of our last call, both load factors and APDs were running ahead of the same time last year. For the last few months bookings have been rather stable, and with only 28% of our inventory in the more volatile European itineraries we are hopeful to return to yield improvement in the fourth quarter."

Q1 2013 OUTLOOK

  • SAME:  Load factors continue to be a little higher YoY.
  • PREVIOUSLY:  "Our order book is solid at this point, our load factors are running ahead of a year ago."

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