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Can Higher Revenues Aid Norwegian Cruise (NCLH) Q4 Earnings?
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Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) is slated to release fourth-quarter 2017 results on Feb 22, before the market opens.
Last quarter, the company delivered a positive earnings surprise of 2.2%. Norwegian Cruise Line has also surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters, with an average beat of approximately 3.8%.
Notably, the stock’s impressive earnings history is well reflected in its robust price performance in a year's time. While the company has gained 24.7%, the Zacks Leisure and Recreation Services industry rallied 20.5%.
Things look rosy for the company in the soon-to-be reported quarter as well. Strong passenger ticket revenues are likely to boost results.
In fact, the Zacks Consensus Estimate for fourth-quarter 2017 earnings has remained stable at 63 cents per share over the last 30 days. However, this reflects a year-over-year improvement of 12.5%. The consensus mark for sales of $1.26 billion also indicates a 11.9% increase from the prior-year quarter.
Given this backdrop, let’s delve deeper to find out the factors likely to have a bearing on the company’s results in the quarter to be reported.
We expect Norwegian Cruise Line’s top line in the fourth quarter to be aided by increased ticket revenues. Additionally, improved pricing and an increase in Capacity Days should aid the company’s revenues. The impressive demand for cruise travel also seems to bode well.
The Zacks Consensus Estimate for passenger ticket revenues in the quarter is pegged at $841 million, above $759 million reported by the company in the fourth quarter of 2016. Additionally, Capacity Days are projected to increase approximately 9% year over year. Gross yield is anticipated to be higher on a year-over-year basis.
Furthermore, the company is expected to benefit from robust marketing initiatives in the soon-to-be reported quarter.
However, we expect high costs to limit Norwegian Cruise Line’s bottom-line growth in the quarter. Investments undertaken by the company to upgrade the facilities for travel are also pushing up costs. Moreover, an increase in fuel prices is further likely to prove detrimental to the company’s earnings growth.
What Does Our Model Indicate?
Our proven model shows that Norwegian Cruise Line is likely to beat on earnings in the to-be-reported quarter. This is because the stock has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase its odds of an earnings surprise.
Zacks ESP: Norwegian Cruise Line has an Earnings ESP of +0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Norwegian Cruise Line carries a Zacks Rank #3, which when combined with a positive ESP, makes us confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise
Norwegian Cruise Line is not the only company in the broader Zacks Consumer Discretionary space that is looking up this earnings season. Here are some companies from the space, which according to our model also have the right combination of elements to post an earnings beat:
Discovery Communications has an Earnings ESP of +6.13% and a Zacks Rank of 3. The company will report fourth-quarter 2017 results on Feb 27.
Nike (NKE - Free Report) has an Earnings ESP of +2.48%. The Zacks #3 Ranked company is expected to report third-quarter fiscal 2018 results on Mar 20.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Higher Revenues Aid Norwegian Cruise (NCLH) Q4 Earnings?
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) is slated to release fourth-quarter 2017 results on Feb 22, before the market opens.
Last quarter, the company delivered a positive earnings surprise of 2.2%. Norwegian Cruise Line has also surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters, with an average beat of approximately 3.8%.
Notably, the stock’s impressive earnings history is well reflected in its robust price performance in a year's time. While the company has gained 24.7%, the Zacks Leisure and Recreation Services industry rallied 20.5%.
Things look rosy for the company in the soon-to-be reported quarter as well. Strong passenger ticket revenues are likely to boost results.
In fact, the Zacks Consensus Estimate for fourth-quarter 2017 earnings has remained stable at 63 cents per share over the last 30 days. However, this reflects a year-over-year improvement of 12.5%. The consensus mark for sales of $1.26 billion also indicates a 11.9% increase from the prior-year quarter.
Given this backdrop, let’s delve deeper to find out the factors likely to have a bearing on the company’s results in the quarter to be reported.
We expect Norwegian Cruise Line’s top line in the fourth quarter to be aided by increased ticket revenues. Additionally, improved pricing and an increase in Capacity Days should aid the company’s revenues. The impressive demand for cruise travel also seems to bode well.
The Zacks Consensus Estimate for passenger ticket revenues in the quarter is pegged at $841 million, above $759 million reported by the company in the fourth quarter of 2016. Additionally, Capacity Days are projected to increase approximately 9% year over year. Gross yield is anticipated to be higher on a year-over-year basis.
Furthermore, the company is expected to benefit from robust marketing initiatives in the soon-to-be reported quarter.
However, we expect high costs to limit Norwegian Cruise Line’s bottom-line growth in the quarter. Investments undertaken by the company to upgrade the facilities for travel are also pushing up costs. Moreover, an increase in fuel prices is further likely to prove detrimental to the company’s earnings growth.
What Does Our Model Indicate?
Our proven model shows that Norwegian Cruise Line is likely to beat on earnings in the to-be-reported quarter. This is because the stock has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase its odds of an earnings surprise.
Zacks ESP: Norwegian Cruise Line has an Earnings ESP of +0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Norwegian Cruise Line carries a Zacks Rank #3, which when combined with a positive ESP, makes us confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise
Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise | Norwegian Cruise Line Holdings Ltd. Quote
Stocks to Consider
Norwegian Cruise Line is not the only company in the broader Zacks Consumer Discretionary space that is looking up this earnings season. Here are some companies from the space, which according to our model also have the right combination of elements to post an earnings beat:
Carnival Corporation (CCL - Free Report) has an Earnings ESP of +3.17% and a Zacks Rank #3. The company is expected to report first-quarter fiscal 2018 results on Mar 27. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Discovery Communications has an Earnings ESP of +6.13% and a Zacks Rank of 3. The company will report fourth-quarter 2017 results on Feb 27.
Nike (NKE - Free Report) has an Earnings ESP of +2.48%. The Zacks #3 Ranked company is expected to report third-quarter fiscal 2018 results on Mar 20.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>