It has been about a month since the last earnings report for Norwegian Cruise Line (NCLH Quick QuoteNCLH - Free Report) . Shares have added about 2.9% in that time frame, outperforming 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 Q2 Earnings Top Estimates,'24 View Up

Norwegian Cruise reported solid second-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.

NCLH continues to build strong momentum, having exceeded its guidance metrics in each quarter of the year. Robust market demand added to the upside. It remains committed to improving efficiencies, reducing costs and strategically restoring margins.

Given the substantial progress made so far and current demand expectations, the company raised its 2024 full-year guidance. It projects an adjusted earnings per share (EPS) growth of 120% from 2023 levels while keeping cost guidance flat relative to the prior year’s tally. Much optimism prevails on account of strong yield growth, disciplined cost management and the initiatives under the Charting the Course strategy.

Earnings & Revenue Discussion

Norwegian Cruise reported an adjusted EPS of 40 cents, topping the Zacks Consensus Estimate of 34 cents by 17.6%. In the prior-year quarter, the company reported an adjusted EPS of 30 cents.

Quarterly revenues of $2.37 billion beat the consensus mark by 0.1%. In the prior-year quarter, the company reported revenues of $2.2 billion.

Passenger ticket revenues were $1.6 billion compared with $1.48 billion reported in the prior-year quarter.

Onboard and other revenues increased to $770.4 million from $727 million reported in the prior-year quarter.

Expenses & Operating Results

Total cruise operating expenses increased 5.1% year over year to $1.45 billion from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from a rise in payroll, fuel, onboard and other expenses.

During the second quarter, gross cruise costs per Capacity Day was $315.3, flat year over year. Adjusted net cruise costs (excluding fuel) per Capacity Day amounted to about $163.4, almost flat year over year. During the quarter, fuel price per metric ton (net of hedges) came in at $719 compared with $715 reported in the prior-year quarter.

Net interest expenses were $178.5 million compared with $177.7 million reported in the year-ago quarter.

Balance Sheet

As of Jun 30, 2024, the company had cash and cash equivalents of $594.1 million compared with $402.4 million at the end of 2023. Long-term debt was $11.9 billion compared with $12.31 billion as of 2023 end.

Booking Update

During the second quarter, the company reported strong consumer demand, with most new bookings shifting toward 2025 sailings. It remains at the upper range of its optimal booked position on a 12-month forward basis. Occupancy during the quarter came in at 105.9%. It reported strong advance ticket sales of $3.9 billion, up 11% from 2023 levels.

Q3 & 2024 Guidance

For third-quarter 2024, NCLH anticipates occupancy to be approximately 108.2% and Capacity Days to be about 6.04 million. During the quarter, adjusted interest expenses are expected to be approximately $180 million, while depreciation and amortization are anticipated to be about $225 million. Adjusted EBITDA is expected to be about $870 million. Adjusted EPS are projected to be nearly 92 cents.

For 2024, the company anticipates occupancy to be approximately 105.2% and Capacity Days to be about 23.5 million. During the year, adjusted interest expenses are expected to be approximately $735 million (down from the prior expectation of about $740 million). Depreciation and amortization are anticipated at nearly $895 million. Adjusted EBITDA during the year is expected to be nearly $2.35 billion, up from the previously-expected $2.25 billion. For 2024, adjusted EPS are currently expected to be nearly $1.53, up from prior expectations of about $1.32.

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 5.51% 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 a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Norwegian Cruise Line has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Norwegian Cruise Line is part of the Zacks Leisure and Recreation Services industry. Over the past month, Live Nation (LYV Quick QuoteLYV - Free Report) , a stock from the same industry, has gained 4%. The company reported its results for the quarter ended June 2024 more than a month ago.

Live Nation reported revenues of $6.02 billion in the last reported quarter, representing a year-over-year change of +7%. EPS of $1.03 for the same period compares with $1.02 a year ago.

Live Nation is expected to post earnings of $1.61 per share for the current quarter, representing a year-over-year change of -9.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -8.4%.

Live Nation has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.