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Carnival (CCL) Inks Deal to Construct 2 New Cruise Ships
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Cruise and vacation company Carnival Corporation (CCL - Free Report) recently announced the addition of two more cruise ships to its massive fleet.
The company has signed a memorandum of agreement with Italian shipbuilder Fincantieri S.p.A. to build the new ships for its Holland America Line and Princess Cruises brands, with final contracts likely to be executed early in 2017.
Notably, the cruise ship for the Holland America Line is slated to be delivered in 2021, while Princess Cruises’ new ship is expected for delivery in 2022.
With the new agreement, Carnival now has 19 new ships planned to be delivered between 2017 and 2022, up from the previous 17.
Inside the Headlines
Holland America Line's new 99,500-ton ship will carry 2,660 passengers and will be the third "Pinnacle" class cruise ship for the line, after the design of its latest and largest ship, ms Koningsdam, and its sister ship, Nieuw Statendam, scheduled for delivery in Nov 2018.
Meanwhile, the new 145,000-ton vessel for Princess Cruises will hold 3,660 guests, being the line's sixth "Royal" class ship. The new vessel will be featuring the successful design platform used on Royal Princess, Regal Princess and Majestic Princess -- the world's first cruise ship built specifically for the Chinese market and scheduled for delivery in Mar 2017 -- as well as its two yet-unnamed sister ships that are under erection by Fincantieri and scheduled for delivery in 2019 and 2020.
The company plans to reveal precise features and amenities for the ships along with deployment details, in the coming months.
Rationale Behind
With these new launches, the company aims to formulate measured capacity growth over time that allows its global fleet to meet escalating demand for cruise vacations around the world. Also, it aspires to provide guests with a remarkable vacation experience at an exceptional value.
In fact, using its strategic fleet enhancement plan to introduce new state-of-the-art vessels, is an integral part of the company’s measured capacity growth strategy. It includes replacing less efficient ships with bigger, advanced and more productive vessels.
Particularly, the company expects these two new vessels to build on the success and reputation of their sister ships. On the back of these successful platforms, Carnival also aims to augment its order book, already at record levels, along with ensuring profitability in the cruise segment, moving ahead.
Bottom Line
Carnival’s shares have outperformed the broader Zacks categorized Leisure & Recreation Services industry over the past six months. While the stock returned 17.9%, the broader industry witnessed a gain of 10.1% in the same time period.
However, the company faces stiff competition from the likes of Royal Caribbean Cruises Ltd. (RCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) . Moreover, increasing fuel costs, negative currency translation along with macroeconomic issues in key operating regions remain potent headwinds.
Nonetheless, we note that Carnival is the largest leisure travel company in the world, with a portfolio of 10 cruise brands, which together operate 102 ships. It also visits more than 700 ports around the world, adding up to 226,000 lower berths.
Going forward, brand-building efforts, improved consumer spending power, new onboard product offerings coupled with various strategic initiatives are expected to drive onboard yields.
Particularly, we believe that given an expected increase in cruise travel throughout 2017, the new ships joining Carnival’s fleet are sure to uplift the currently Zacks Rank #4 (Sell) company.
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Carnival (CCL) Inks Deal to Construct 2 New Cruise Ships
Cruise and vacation company Carnival Corporation (CCL - Free Report) recently announced the addition of two more cruise ships to its massive fleet.
The company has signed a memorandum of agreement with Italian shipbuilder Fincantieri S.p.A. to build the new ships for its Holland America Line and Princess Cruises brands, with final contracts likely to be executed early in 2017.
Notably, the cruise ship for the Holland America Line is slated to be delivered in 2021, while Princess Cruises’ new ship is expected for delivery in 2022.
With the new agreement, Carnival now has 19 new ships planned to be delivered between 2017 and 2022, up from the previous 17.
Inside the Headlines
Holland America Line's new 99,500-ton ship will carry 2,660 passengers and will be the third "Pinnacle" class cruise ship for the line, after the design of its latest and largest ship, ms Koningsdam, and its sister ship, Nieuw Statendam, scheduled for delivery in Nov 2018.
Meanwhile, the new 145,000-ton vessel for Princess Cruises will hold 3,660 guests, being the line's sixth "Royal" class ship. The new vessel will be featuring the successful design platform used on Royal Princess, Regal Princess and Majestic Princess -- the world's first cruise ship built specifically for the Chinese market and scheduled for delivery in Mar 2017 -- as well as its two yet-unnamed sister ships that are under erection by Fincantieri and scheduled for delivery in 2019 and 2020.
The company plans to reveal precise features and amenities for the ships along with deployment details, in the coming months.
Rationale Behind
With these new launches, the company aims to formulate measured capacity growth over time that allows its global fleet to meet escalating demand for cruise vacations around the world. Also, it aspires to provide guests with a remarkable vacation experience at an exceptional value.
In fact, using its strategic fleet enhancement plan to introduce new state-of-the-art vessels, is an integral part of the company’s measured capacity growth strategy. It includes replacing less efficient ships with bigger, advanced and more productive vessels.
Particularly, the company expects these two new vessels to build on the success and reputation of their sister ships. On the back of these successful platforms, Carnival also aims to augment its order book, already at record levels, along with ensuring profitability in the cruise segment, moving ahead.
Bottom Line
Carnival’s shares have outperformed the broader Zacks categorized Leisure & Recreation Services industry over the past six months. While the stock returned 17.9%, the broader industry witnessed a gain of 10.1% in the same time period.
However, the company faces stiff competition from the likes of Royal Caribbean Cruises Ltd. (RCL - Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) . Moreover, increasing fuel costs, negative currency translation along with macroeconomic issues in key operating regions remain potent headwinds.
Nonetheless, we note that Carnival is the largest leisure travel company in the world, with a portfolio of 10 cruise brands, which together operate 102 ships. It also visits more than 700 ports around the world, adding up to 226,000 lower berths.
Going forward, brand-building efforts, improved consumer spending power, new onboard product offerings coupled with various strategic initiatives are expected to drive onboard yields.
Particularly, we believe that given an expected increase in cruise travel throughout 2017, the new ships joining Carnival’s fleet are sure to uplift the currently Zacks Rank #4 (Sell) company.
A better-ranked stock in this sector is SeaWorld Entertainment, Inc. , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>