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Norwegian Cruise Line (NCLH) Up 3.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Norwegian Cruise Line (NCLH - Free Report) . Shares have added about 3.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Norwegian Cruise Line due for a pullback? 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 reported mixed first-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. On the other hand, the top and the bottom lines increased on a year-over-year basis.
The quarterly results showcase robust demand for the company’s products and offerings, resulting in record bookings. This uptrend aided the company to continue its all-time high booked position and an unprecedented level of advance ticket sales through 2024. Also, its ongoing margin enhancement initiative drove continued improvement in operating costs, thus benefiting the bottom line. Owing to the improving trend, the company raised its adjusted EBITDA and adjusted earnings per share (EPS) outlook for 2024.
NCLH is also optimistic about its newbuild program, as it believes that enhancing its capacity and elevating the product portfolio will further drive its growth prospects in the upcoming period.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted earnings per share of 16 cents, topping the Zacks Consensus Estimate of 12 cents by 33.3%. In the prior-year quarter, the company reported an adjusted loss per share of 30 cents.
Quarterly revenues of $2.19 billion missed the consensus mark of $2.24 billion by 2.2%. In the prior-year quarter, the company reported revenues of $1.82 billion.
Passenger ticket revenues were $1.46 billion compared with $1.21 billion reported in the prior-year quarter.
Onboard and other revenues increased to $731.4 million from $613.1 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 8.6% to $1.39 billion from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from a rise in payroll, fuel, and commissions, transportation, onboard and other expenses.
During the first quarter, gross cruise costs per Capacity Day was $300, up from $298 reported a year ago. Adjusted net cruise costs (excluding fuel) per Capacity Day amounted to about $165 (or $164 in cc), reflecting flat year-over-year growth. Fuel price per metric ton (net of hedges) fell to $735 from $779 in 2023.
Net interest expenses were $218.2 million compared with $171.3 million reported in the year-ago quarter.
Balance Sheet
As of Mar 31, 2024, Norwegian Cruise had cash and cash equivalents of $559.8 million compared with $402.4 million at the end of 2023. Long-term debt was $12.01 billion compared with $12.31 billion as of 2023 end.
Booking Update
During the first quarter, the company reported strong consumer demand, achieving record-high bookings during a strong WAVE season. This helped NCLH attain a continued record booked position for the next twelve months. It reported an 11% rise in Onboard revenue per Capacity Day year over year. The company reported a record high Advance ticket sales of $3.8 billion, up 13% from 2023 levels.
The exceptional demand across all three reportable brands of the company almost fully offset the impact of the redeployed voyages related to the Middle East and the Red Sea.
Q2 & 2024 Guidance
For the second quarter of 2024, Norwegian Cruise anticipates occupancy to be approximately 105.7% and Capacity Days to be about 5.8 million. During the quarter, adjusted interest expenses are expected to be approximately $185 million, while depreciation and amortization are anticipated to be about $225 million. Adjusted EBITDA is expected to be about $555 million. Adjusted EPS is projected to be nearly 32 cents.
For 2024, the company anticipates occupancy to be approximately 105.1% and Capacity Days to be about 23.5 million. During the year, adjusted interest expenses are now expected at approximately $740 million (up from the prior expectation of about $730 million). Depreciation and amortization are anticipated at nearly $895 million. Adjusted EBITDA during the year is now expected to be nearly $2.25 billion, up from the previously expected $2.2 billion approximately. For 2024, adjusted EPS is currently expected to be nearly $1.32, up from prior expectations of about $1.23.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 8.05% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Norwegian Cruise Line has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Norwegian Cruise Line belongs to the Zacks Leisure and Recreation Services industry. Another stock from the same industry, Royal Caribbean (RCL - Free Report) , has gained 7.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Royal Caribbean reported revenues of $3.73 billion in the last reported quarter, representing a year-over-year change of +29.2%. EPS of $1.77 for the same period compares with -$0.23 a year ago.
Royal Caribbean is expected to post earnings of $2.75 per share for the current quarter, representing a year-over-year change of +51.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Royal Caribbean. Also, the stock has a VGM Score of B.
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Norwegian Cruise Line (NCLH) Up 3.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Norwegian Cruise Line (NCLH - Free Report) . Shares have added about 3.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Norwegian Cruise Line due for a pullback? 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 Q1 Earnings Beat, Bookings Rise Y/Y
Norwegian Cruise reported mixed first-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. On the other hand, the top and the bottom lines increased on a year-over-year basis.
The quarterly results showcase robust demand for the company’s products and offerings, resulting in record bookings. This uptrend aided the company to continue its all-time high booked position and an unprecedented level of advance ticket sales through 2024. Also, its ongoing margin enhancement initiative drove continued improvement in operating costs, thus benefiting the bottom line. Owing to the improving trend, the company raised its adjusted EBITDA and adjusted earnings per share (EPS) outlook for 2024.
NCLH is also optimistic about its newbuild program, as it believes that enhancing its capacity and elevating the product portfolio will further drive its growth prospects in the upcoming period.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted earnings per share of 16 cents, topping the Zacks Consensus Estimate of 12 cents by 33.3%. In the prior-year quarter, the company reported an adjusted loss per share of 30 cents.
Quarterly revenues of $2.19 billion missed the consensus mark of $2.24 billion by 2.2%. In the prior-year quarter, the company reported revenues of $1.82 billion.
Passenger ticket revenues were $1.46 billion compared with $1.21 billion reported in the prior-year quarter.
Onboard and other revenues increased to $731.4 million from $613.1 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 8.6% to $1.39 billion from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from a rise in payroll, fuel, and commissions, transportation, onboard and other expenses.
During the first quarter, gross cruise costs per Capacity Day was $300, up from $298 reported a year ago. Adjusted net cruise costs (excluding fuel) per Capacity Day amounted to about $165 (or $164 in cc), reflecting flat year-over-year growth. Fuel price per metric ton (net of hedges) fell to $735 from $779 in 2023.
Net interest expenses were $218.2 million compared with $171.3 million reported in the year-ago quarter.
Balance Sheet
As of Mar 31, 2024, Norwegian Cruise had cash and cash equivalents of $559.8 million compared with $402.4 million at the end of 2023. Long-term debt was $12.01 billion compared with $12.31 billion as of 2023 end.
Booking Update
During the first quarter, the company reported strong consumer demand, achieving record-high bookings during a strong WAVE season. This helped NCLH attain a continued record booked position for the next twelve months. It reported an 11% rise in Onboard revenue per Capacity Day year over year. The company reported a record high Advance ticket sales of $3.8 billion, up 13% from 2023 levels.
The exceptional demand across all three reportable brands of the company almost fully offset the impact of the redeployed voyages related to the Middle East and the Red Sea.
Q2 & 2024 Guidance
For the second quarter of 2024, Norwegian Cruise anticipates occupancy to be approximately 105.7% and Capacity Days to be about 5.8 million. During the quarter, adjusted interest expenses are expected to be approximately $185 million, while depreciation and amortization are anticipated to be about $225 million. Adjusted EBITDA is expected to be about $555 million. Adjusted EPS is projected to be nearly 32 cents.
For 2024, the company anticipates occupancy to be approximately 105.1% and Capacity Days to be about 23.5 million. During the year, adjusted interest expenses are now expected at approximately $740 million (up from the prior expectation of about $730 million). Depreciation and amortization are anticipated at nearly $895 million. Adjusted EBITDA during the year is now expected to be nearly $2.25 billion, up from the previously expected $2.2 billion approximately. For 2024, adjusted EPS is currently expected to be nearly $1.32, up from prior expectations of about $1.23.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 8.05% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Norwegian Cruise Line has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Norwegian Cruise Line belongs to the Zacks Leisure and Recreation Services industry. Another stock from the same industry, Royal Caribbean (RCL - Free Report) , has gained 7.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Royal Caribbean reported revenues of $3.73 billion in the last reported quarter, representing a year-over-year change of +29.2%. EPS of $1.77 for the same period compares with -$0.23 a year ago.
Royal Caribbean is expected to post earnings of $2.75 per share for the current quarter, representing a year-over-year change of +51.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Royal Caribbean. Also, the stock has a VGM Score of B.