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Norwegian Cruise (NCLH) Q2 Earnings Beat Fails to Lift Stock
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Norwegian Cruise Line Holdings Ltd.NCLH reported second-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line surpassed estimates for the fourth-straight quarter.
The top and bottom lines increased on a year-over-year basis. The upside was primarily driven by strong consumer demand, solid booking environment and robust onboard revenue generation. Despite reporting robust results, NCLH shares are down 8.5% in pre-market trading session as its guidance hurt investors’ sentiment.
Earnings & Revenue Discussion
Norwegian Cruise reported adjusted earnings per share of 30 cents, beating the Zacks Consensus Estimate of 27 cents. In the prior-year quarter, NCLH incurred adjusted loss per share of $1.14.
Quarterly revenues of $2,205.5 million outshined the consensus estimate of $2,178 million. The metric jumped 85.8% year over year.
Passenger ticket revenues were $1,478.5 million, up 86.2% year over year. Our model predicted the metric to surge 117.5% year over year. Onboard and other revenues amounted to $727 million, up 84.9% year over year.
Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise
Total cruise operating expenses grew 28.9% to $1,383.6 million in the quarter under review from the year-ago quarter’s levels. The company reported a rise in payroll, food as well as onboard and other expenses. Our model suggested total cruise operating expenses to increase 22.6% year over year.
During the second quarter, gross cruise costs climbed 44.7% (from 2019 levels) to $1,735.8 million. Adjusted net cruise costs amounted to $857.4 million compared with $661.8 million in the first quarter of 2019. Fuel price per metric ton (net of hedges) declined to $715 from $836 in 2022.
Net interest expenses in the quarter were $177.7 million compared with $144.4 million reported in the year-ago quarter.
Balance Sheet
Cash and cash equivalents, as of Jun 30, 2023, were $899.1 million compared with $947 million at the end of Dec 31, 2022. Long-term debt, as of Jun 30, 2023, came in at $11.99 billion compared with $12.6 billion as of Dec 31, 2022.
Booking Update
Norwegian Cruise stated that cumulative booked position for the second half of 2023 are higher than 2019 levels. Also, it reported strength in advance ticket sales. As of Jun 30, 2023, advance ticket sales balance, including the long-term portion, was $3.5 billion, nearly $167 million more than the prior quarter.
On the other hand, management said that occupancy touched 105% for the second quarter of 2023. NCLH expects 2023 occupancy to be 103.5%, on average.
Guidance
For the third quarter of 2023, Norwegian Cruise anticipates occupancy to be approximately 106%. Capacity Days are expected to be approximately 5.85 million.
During the quarter, adjusted interest expense, and depreciation and amortization are projected to be approximately $185 million and $205 million, respectively. Adjusted EBITDA is estimated to be nearly $730 million.
For the third quarter, adjusted EPS is projected to be nearly 70 cents. The Zacks Consensus Estimate for third-quarter EPS is pegged at 80 cents.
For 2023, NCLH anticipates occupancy to be approximately 103.5%. Capacity Days are expected to be approximately 22.7 million.
During the year, adjusted interest expenses, and depreciation and amortization are expected to be approximately $720 million and $815 million, respectively. Adjusted EBITDA during the year is anticipated in the range of $1.85-1.95 billion compared with the prior estimation of $1.8-1.95 billion.
For 2023, adjusted EPS is projected to be nearly 80 cents. The consensus estimate for 2023 EPS is pegged at 82 cents.
Zacks Rank
Norwegian Cruise currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests increases of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 8.7% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales indicates a rise of 13.5% from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have soared 68.1% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS implies gains of 34% and 89.3%, respectively, from the year-ago period’s levels.
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Norwegian Cruise (NCLH) Q2 Earnings Beat Fails to Lift Stock
Norwegian Cruise Line Holdings Ltd. NCLH reported second-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line surpassed estimates for the fourth-straight quarter.
The top and bottom lines increased on a year-over-year basis. The upside was primarily driven by strong consumer demand, solid booking environment and robust onboard revenue generation. Despite reporting robust results, NCLH shares are down 8.5% in pre-market trading session as its guidance hurt investors’ sentiment.
Earnings & Revenue Discussion
Norwegian Cruise reported adjusted earnings per share of 30 cents, beating the Zacks Consensus Estimate of 27 cents. In the prior-year quarter, NCLH incurred adjusted loss per share of $1.14.
Quarterly revenues of $2,205.5 million outshined the consensus estimate of $2,178 million. The metric jumped 85.8% year over year.
Passenger ticket revenues were $1,478.5 million, up 86.2% year over year. Our model predicted the metric to surge 117.5% year over year. Onboard and other revenues amounted to $727 million, up 84.9% year over year.
Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise
Norwegian Cruise Line Holdings Ltd. price-consensus-eps-surprise-chart | Norwegian Cruise Line Holdings Ltd. Quote
Expenses & Operating Results
Total cruise operating expenses grew 28.9% to $1,383.6 million in the quarter under review from the year-ago quarter’s levels. The company reported a rise in payroll, food as well as onboard and other expenses. Our model suggested total cruise operating expenses to increase 22.6% year over year.
During the second quarter, gross cruise costs climbed 44.7% (from 2019 levels) to $1,735.8 million. Adjusted net cruise costs amounted to $857.4 million compared with $661.8 million in the first quarter of 2019. Fuel price per metric ton (net of hedges) declined to $715 from $836 in 2022.
Net interest expenses in the quarter were $177.7 million compared with $144.4 million reported in the year-ago quarter.
Balance Sheet
Cash and cash equivalents, as of Jun 30, 2023, were $899.1 million compared with $947 million at the end of Dec 31, 2022. Long-term debt, as of Jun 30, 2023, came in at $11.99 billion compared with $12.6 billion as of Dec 31, 2022.
Booking Update
Norwegian Cruise stated that cumulative booked position for the second half of 2023 are higher than 2019 levels. Also, it reported strength in advance ticket sales. As of Jun 30, 2023, advance ticket sales balance, including the long-term portion, was $3.5 billion, nearly $167 million more than the prior quarter.
On the other hand, management said that occupancy touched 105% for the second quarter of 2023. NCLH expects 2023 occupancy to be 103.5%, on average.
Guidance
For the third quarter of 2023, Norwegian Cruise anticipates occupancy to be approximately 106%. Capacity Days are expected to be approximately 5.85 million.
During the quarter, adjusted interest expense, and depreciation and amortization are projected to be approximately $185 million and $205 million, respectively. Adjusted EBITDA is estimated to be nearly $730 million.
For the third quarter, adjusted EPS is projected to be nearly 70 cents. The Zacks Consensus Estimate for third-quarter EPS is pegged at 80 cents.
For 2023, NCLH anticipates occupancy to be approximately 103.5%. Capacity Days are expected to be approximately 22.7 million.
During the year, adjusted interest expenses, and depreciation and amortization are expected to be approximately $720 million and $815 million, respectively. Adjusted EBITDA during the year is anticipated in the range of $1.85-1.95 billion compared with the prior estimation of $1.8-1.95 billion.
For 2023, adjusted EPS is projected to be nearly 80 cents. The consensus estimate for 2023 EPS is pegged at 82 cents.
Zacks Rank
Norwegian Cruise currently has a Zacks Rank #2 (Buy).
Other Key Picks
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have surged 62.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests increases of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 8.7% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales indicates a rise of 13.5% from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have soared 68.1% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS implies gains of 34% and 89.3%, respectively, from the year-ago period’s levels.