Tuesday, September 22, 2009

Carnival Cruise Creates More Questions

Carnival Cruise Lines (CUK) made a big splash with better than expected results but a soft forecast/guidance adjustment. The press release dealt with a few high level metrics but really did not discuss any fundamental business issues.

For instance with consumer spending expected to be lacklustre where is the booking revenue coming from. There was no real discussion about product offerings, market segmentation, competition or fundamental drivers of business activity. Fuel costs will always be a major cost component much as they are for airlines. No discussion was offered.

Investors need a management team that will explain and discuss the whole business and not just the front-end glitzy portion.