I paid another look into the last CCL report (ending February, a minor holiday season).
Revenues are up 500M but so are costs, so that operating income shrunk. After commission the largest single expense item is fuel, exceeding payroll with nearly 400MM (up from 220MM). Higher interest expense further shrunk net income.
If fuel would go up again by 60%, CCL would actually post a loss.
Its current ratio is toxic, interestingly CCL has a load of current liabities. (7.4B, far exceeding current assets).
Amongst those are "customer deposits" of 2.8B, but it shows only cash, short term investments and prepaid expenses of some 1.25B.
WHAT THE FUCK have they done with the customer deposits??
As I said earlier, rising fuel costs are hard to pass on, see below:
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Litigation
The Office of the Attorney General of Florida (“Attorney General”) is conducting a review of the implementation of fuel supplement programs by certain cruise operators, including some of our cruise lines. The Attorney General is also conducting an investigation to determine whether there is, or has been, a violation of Florida or federal antitrust laws in connection with the setting by us and other unaffiliated cruise lines of certain of their respective fuel supplements.
In February and March 2008, five class action lawsuits were filed in the U.S. against Carnival Corporation, other unaffiliated cruise lines and a trade association, on behalf of individuals affected by the implementation of a fuel supplement. The plaintiffs allege violations of federal antitrust laws and state deceptive and unfair trade practices in connection with the implementation of the fuel supplement.
OUTLOOK:
Outlook for Remainder of Fiscal 2008
As of March 20, 2008, we said that we expected our diluted earnings per share for the second quarter and full year of 2008 would be in the range of $0.42 to $0.44 and $3.00 to $3.20, respectively. Our guidance was based on the then current forward fuel price of $528 per metric ton and $525 per metric ton for the 2008 second quarter and full year, respectively. In addition, this guidance was also based on 2008 second quarter and full year currency exchange rates of $1.57 and $1.55 to the euro, respectively, and $2.00 to sterling for both periods.
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