Miami-based leading cruise company Royal Caribbean
Cruises Ltd. ( RCL ) recently inked an agreement with STX
France to build an Oasis-class ship. The ship, which is scheduled
to be delivered in mid-2016, is the third Oasis-class vessel after
Oasis of the Seas and Allure of the Seas.
The company did not disclose the exact price of the new vessel,
but it has hinted that the price will be moderate.
According to the order, Pullmantur's cruise ship, Atlantic Star,
will be delivered to STX France as a part payment. Furthermore, STX
France has also offered a one-year option to the company to deliver
another Oasis-class ship in 2018 at same price. The contract, which
is in line with the company's previously declared plan in October,
is subject to the fulfillment of certain financial terms and
The company's Oasis of the Seas and Allure of the Seas, launched
in November 2009 and November 2010, respectively, are the biggest
cruise ships in the world with 16 decks and they feature 2,700
staterooms. These ships introduced a new era for the cruise
vacation industry. Now, with the addition of this vessel under
Oasis-brand, the company will be able to further enhance its cruise
services and attract more customers.
Including this new order and existing contracts, Royal Caribbean
expects its capital expenditures to be $1.3 billion, $700 million,
$1.2 billion, $1.2 billion and $1.3 billion in 2012, 2013, 2014,
2015 and 2016, respectively.
Royal Caribbean competes with major cruise companies like
Carnival Corporation ( CCL )
and Carnival plc ( CUK ).
Carnival Corporation's ship Costa Concordia had run aground in
mid-January 2012 on the Italian west coast. This disaster had hit
the cruise industry in the wake of the 'wave season' between
January and March.
However, the disturbance seems to have reduced as reflected
by Royal Caribbean's amplified earnings guidance. For full-year
2012, management raised its earnings per share guidance to the
range of $1.85-$1.95 from the range of $1.70-$1.80.
Royal Caribbean currently retains a Zacks #3 Rank (a short-term
'Hold' rating).CARNIVAL CORP (CCL): Free Stock Analysis ReportCARNIVAL PLC (CUK): Free Stock Analysis ReportROYAL CARIBBEAN (RCL): Free Stock Analysis
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