Robin Farley News

Royal Caribbean Cruises Ltd forecast higher-than-expected adjusted earnings for 2017, helped by a strong start to bookings for Caribbean cruises, putting the No. 2 U.S. cruise operator on track to beat its own forecast of doubling profit from 2014. The company's upbeat forecast sent its shares to more than a year high and also lifted rivals Carnival Corp and Norwegian Cruise Line Holdings Ltd. "While trends have been strong from our key sourcing regions, we are particularly encouraged by what we are seeing in North America…

After an uneven couple of years punctuated by struggling economic factors worldwide, maturing markets and some highly publicized accidents and illnesses, the cruise industry is hoping to find a little “double happiness” from the rapidly growing Chinese market – enhanced profits and renewed market growth for both operators and builders. For its part, the Chinese government is betting on a triple payout:  it hopes to serve a growing middle class (estimated at a potential 300 million market) and its desire for cruising vacations…

Carnival Corp, the world's largest cruise operator, forecast an adjusted profit below market estimates for the current quarter, blaming increased competition in the Caribbean. Shares of the company, which operates the Carnival, Holland America and Costa cruise lines, fell as much as 3 percent. "The North American brands are ahead on price but are still behind on occupancy as a result of the large increase in industry capacity in the Caribbean," Chief Financial Officer David Bernstein said on a conference call.

The big cruise lines have been steadily filling their rapidly expanding fleets with passengers looking to escape an especially harsh North American winter, but as they get ready to release quarterly results, Wall Street is worried that ticket prices may not be high enough. Analysts are expecting profit declines for the winter quarter from the top three cruise lines, starting with industry leader Carnival Corp., which plans to release its fiscal first-quarter results on Wednesday (March 21, 2001). Cruise stocks, including those of Royal Caribbean, the world's No. 2 operator, and Britain's P&O Princess Cruises, which ranks third, have in recent weeks given up much of their bounce back gains after a sustained decline last year.

Deutsche Banc Alex. Brown analyst Robin Farley raised her 2000 per-share earnings forecast for Carnival Corp. by 10 cents, to $1.95, saying the world's biggest cruise group was getting better prices. "We believe that Carnival will experience a positive pricing environment in 4Q and 2000 (somewhat helped by Millennium pricing)," Farley wrote in a report. "Additionally, Carnival should benefit from double-digit capacity increases in 2000 of 12.5 percent with the introduction of Carnival Victory, Costa Atlantica and two Holland America ships." Farley said shares of Carnival, operator of 45 ships, could touch $52 if they are given the current price-earnings multiples of other Standard & Poor's 500 companies of 26.6, instead of 23.4, based on her earnings forecast for 2000.

Carnival Corp said on Tuesday its growing cash holdings were spurring market speculation that the world's largest cruise group was on the acquisitions trail. A spokesman for the Miami-based operator of 45 cruise ships, declined to speak directly to reports that Carnival may be working on a bid for Hapag-Lloyd cruises. "It is our policy not to comment on market rumors," he said. Hapag-Lloyd, a unit of the world's largest travel group Preussag AG, operates five ships in German-speaking countries. A spokesman for Hapag-Lloyd said on Monday he knew of no bid for the company. With pricing pressure in its core North American markets, Carnival has been looking to Europe for growth.

The world’s biggest cruise lines have made their own computers shipshape against Year 2000 glitches but still face possible electronic squalls arising from problems faced by food vendors and other suppliers. The lines have spent tens of millions of dollars swapping out software and replacing computers and are now confident the onboard systems controlling propulsion, navigation, elevators and cabin locks will work in 2000, according to the companies, analysts and consultants. No cruise ship carrying millennium party-goers will lose power and stop dead under a Caribbean moon or partway through the Panama Canal, analysts and consultants said.

The world's biggest cruise lines have made their own computers shipshape against Year 2000 glitches but still face possible electronic squalls arising from problems faced by food vendors and other suppliers. The lines have spent tens of millions of dollars swapping out software and replacing computers and are now confident the onboard systems controlling propulsion, navigation, elevators and cabin locks will work in 2000, according to the companies, analysts and consultants. No cruise ship carrying millennium party-goers will lose power and stop dead under a Caribbean moon or partway through the Panama Canal, analysts and consultants said.