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Why Is Norwegian Cruise Line (NCLH) Down 13.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Norwegian Cruise Line (NCLH - Free Report) . Shares have lost about 13.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Norwegian Cruise Line due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Norwegian Cruise Q4 Earnings Lag Estimates, Revenues Top
Norwegian Cruise reported fourth-quarter 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line improved on a year-over-year basis.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $1.04, wider than the Zacks Consensus Estimate of a loss of 89 cents. In the prior-year quarter, the company reported a loss per share of $1.95.
Quarterly revenues of $1,519.1 million beat the consensus mark of $1,500 million. In the prior-year quarter, the company reported revenues of $487.4 million. The upside can primarily be attributed to the resumption of cruise operations.
In the quarter under review, passenger ticket revenues were $1,011.5 million compared with $304.9 million reported in the prior-year quarter. Onboard and other revenues increased to $507.6 million from $182.6 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 69.9% in the quarter under review from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from the resumption of cruise voyages and inflationary pressures. The company noted that the increase in 2022 reflects an improvement in payroll, fuel and direct variable costs of fully operating ships.
Gross cruise costs in the fourth quarter declined 0.7% year over year to $1,598 million. Adjusted net cruise costs (excluding fuel) amounted to $974.7 million compared with $982.2 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $755 from $737 in 2021.
Net interest expenses in the quarter were $177.1 million, compared with $950 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Dec 31, 2022, were $947 million compared with $1,186.7 million at the end of Sep 30, 2022. Long-term debt, as of Dec 31, 2022, came in at $12.6 billion compared with $12.9 billion as of Sep 30, 2022.
2021 Highlights
Total revenues in 2022 came in at $4,843.8 million compared with $648 million reported in 2021.
Adjusted EBITDA in 2022 came in at ($673.9) million compared with $(1,723.8) million reported in 2021.
In 2022, adjusted earnings per share (EPS) came in at $(4.64) compared with $(8.07) reported in the previous year.
Booking Update
During the fourth quarter, the company reported solid booking volumes courtesy of strong demand in the WAVE season. The company stated that the cumulative booked position for 2023 are higher than 2019 levels. Also, it reported strength in advance ticket sales. As of Dec 31, 2022, the company’s advance ticket sales balance came in at $2.7 billion, reflecting a hike of 9% (from previous quarter) and 30% (from 2019 levels). The company stated pricing levels to be elevated.
2023 Guidance
For the first quarter of 2023, the company anticipates occupancy to be approximately 100% and Capacity Days to be approximately 5.45 million. During the quarter, adjusted interest expense is expected at approximately $175 million, while depreciation and amortization is anticipated at approximately $200 million. Adjusted EBITDA is expected at roughly $195 million. For the first quarter, adjusted EPS is projected to be nearly (45) cents.
For 2023, the company anticipates occupancy to be approximately 103.5% and Capacity Days to be approximately 22.8 million. During the year, adjusted interest expense is expected at approximately $730 million, while depreciation and amortization are anticipated at approximately $830 million. Adjusted EBITDA during the year is expected in the range of $1.8-1.95 million. For 2023, adjusted EPS is projected to be nearly 70 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -24.03% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Norwegian Cruise Line has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Norwegian Cruise Line (NCLH) Down 13.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Norwegian Cruise Line (NCLH - Free Report) . Shares have lost about 13.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Norwegian Cruise Line due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Norwegian Cruise Q4 Earnings Lag Estimates, Revenues Top
Norwegian Cruise reported fourth-quarter 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line improved on a year-over-year basis.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $1.04, wider than the Zacks Consensus Estimate of a loss of 89 cents. In the prior-year quarter, the company reported a loss per share of $1.95.
Quarterly revenues of $1,519.1 million beat the consensus mark of $1,500 million. In the prior-year quarter, the company reported revenues of $487.4 million. The upside can primarily be attributed to the resumption of cruise operations.
In the quarter under review, passenger ticket revenues were $1,011.5 million compared with $304.9 million reported in the prior-year quarter. Onboard and other revenues increased to $507.6 million from $182.6 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 69.9% in the quarter under review from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from the resumption of cruise voyages and inflationary pressures. The company noted that the increase in 2022 reflects an improvement in payroll, fuel and direct variable costs of fully operating ships.
Gross cruise costs in the fourth quarter declined 0.7% year over year to $1,598 million. Adjusted net cruise costs (excluding fuel) amounted to $974.7 million compared with $982.2 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $755 from $737 in 2021.
Net interest expenses in the quarter were $177.1 million, compared with $950 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Dec 31, 2022, were $947 million compared with $1,186.7 million at the end of Sep 30, 2022. Long-term debt, as of Dec 31, 2022, came in at $12.6 billion compared with $12.9 billion as of Sep 30, 2022.
2021 Highlights
Total revenues in 2022 came in at $4,843.8 million compared with $648 million reported in 2021.
Adjusted EBITDA in 2022 came in at ($673.9) million compared with $(1,723.8) million reported in 2021.
In 2022, adjusted earnings per share (EPS) came in at $(4.64) compared with $(8.07) reported in the previous year.
Booking Update
During the fourth quarter, the company reported solid booking volumes courtesy of strong demand in the WAVE season. The company stated that the cumulative booked position for 2023 are higher than 2019 levels. Also, it reported strength in advance ticket sales. As of Dec 31, 2022, the company’s advance ticket sales balance came in at $2.7 billion, reflecting a hike of 9% (from previous quarter) and 30% (from 2019 levels). The company stated pricing levels to be elevated.
2023 Guidance
For the first quarter of 2023, the company anticipates occupancy to be approximately 100% and Capacity Days to be approximately 5.45 million. During the quarter, adjusted interest expense is expected at approximately $175 million, while depreciation and amortization is anticipated at approximately $200 million. Adjusted EBITDA is expected at roughly $195 million. For the first quarter, adjusted EPS is projected to be nearly (45) cents.
For 2023, the company anticipates occupancy to be approximately 103.5% and Capacity Days to be approximately 22.8 million. During the year, adjusted interest expense is expected at approximately $730 million, while depreciation and amortization are anticipated at approximately $830 million. Adjusted EBITDA during the year is expected in the range of $1.8-1.95 million. For 2023, adjusted EPS is projected to be nearly 70 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -24.03% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Norwegian Cruise Line has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.