RCL 2Q 2013 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:  

  • IN-LINE:  As seen by our recent pricing surveys, weaker Caribbean market and aggressive pricing is being offset by a steadily improving Europe market for Royal Caribbean. FY 2013 guidance remains relatively unchanged.  Caribbean pressures should not be any comfort, particularly to Carnival. 

RCL 2Q 2013 REPORT CARD - 111

RCL 2Q 2013 REPORT CARD - 2

 

ONBOARD REVENUE

  • BETTER:  2Q onboard yields were up a whopping 8.2%.  Gaming, beverage, specialty restaurants, shore excursions all outperformed.
  • PREVIOUSLY:  "We saw improvement in all categories for onboard revenue. Ships that have been recently revitalized and vessels sailing on new itineraries did particularly well."

CARIBBEAN

  • WORSE:  Mgmt reduced Caribbean expectations for the rest of FY 2013 as pricing competition has picked up recently
  • PREVIOUSLY:  "Over the last few weeks though, we have seen an improvement in booking activity and we are still forecasting record yields for the Caribbean."

BOOKINGS CURVE

  • SAME:  Booking window has been expanding  
  • PREVIOUSLY:  "On average, our guests are booking their cruise about two weeks earlier this year than they were in 2011 and 2012. In fact, the booking curve has looked strikingly similar to 2008 for the last several months."

EUROPE

  • BETTER:  Mid single-digits ticket yield growth is above expectations.  Mgmt is more comfortable with the outlook on Europe and is optimistic on this market in 2014.  
  • PREVIOUSLY:  "We considered our European summer revenue projections to have more risks attached to them in comparison to other spheres of deployment. Although there is still somewhat limited visibility for all of our summer deployment, at this juncture, in Europe, we are sufficiently ahead of 2012 on both rate and occupancy, to be comfortable that our European deployment is of comparable risk to our other programs."

CHINA/JAPAN

  • SAME:  one of the drivers which lowered yield expectations for the year.  The terriotory disputes have resulted in 30 modified sailings and increased bookings volatility.  China is 3% deployment for 2013.
  • PREVIOUSLY:  "Turning to China, the region that represents 5% of our capacity in 2013. The hostility between Japan and China surrounding the disputed islands in the East China Sea continues to affect our itineraries and our demand generation. We have now removed the Japanese ports of call from nearly all of 2013's North Asia program. As a result, most itineraries from our China homeport of Shanghai and Tianjin are calling only on ports of call on South Korea."

AUSTRALIA

  • SAME:  Increased capacity continues to pressure yields in this market
  • PREVIOUSLY:  "In the near-term is flat to slightly lower yield outlook for us for this year. we would expect that Australia, as a southern summer market, would continue to grow and be a mainstay of the cruise industry going forward."

PULLMANTUR

  • SAME:  Has been lagging its competitiors.  RCL recently opened a new head office in Latin America.
  • PREVIOUSLY:  "Pullmantur's performance is inevitably affected by that [Spain] very strongly and that's been a big disappointment and I don't see any quick turn away from massive improvement given the economic situation."

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more