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Norwegian Cruise Line (NCLH) Q4 Earnings Beat, Improve Y/Y

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Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) performed very well in the fourth quarter of 2017, reporting better-than-expected earnings per share and revenues. The company’s earnings (excluding 25 cents from non-recurring items) came in at 68 cents per share, up 21.4% on a year-over-year basis. Higher revenues aided results.

The company’s revenues of $1,249.6 million, fell short of the Zacks Consensus Estimate of $1,251.7 million. However, the top line improved 11.1% on a year-over-year basis. The increase was aided by a 9.9% increase in passenger ticket revenues to $833.3 million. The same from onboard and other sources was up 13.5% on a year-over-year basis to $416.3 million. Gross yield increased 2.5% in the quarter on a year-over-year basis. 

Adjusted net yield grew 3.4% on a constant currency basis. The measure was up 3.9% on a reported basis. Fuel price per metric ton increased marginally to $460. Total cruise operating expenses were up 8.4% to $753.4 million backed by rise in fuel costs, among other factors.

Moreover, marketing, general and administrative expenses increased significantly to $185.8 million.  Gross Cruise Costs (sum of cruise operating expense and marketing, general and administrative cost) per Capacity Day increased 1.2% in the final quarter of 2017.

Notably, Norwegian Cruise Line’s fellow cruise line operator — Royal Caribbean Cruises Ltd. (RCL - Free Report) — had also reported better-than-expected fourth quarter 2017 results last month.

Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise

 

Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise | Norwegian Cruise Line Holdings Ltd. Quote

Outlook

Norwegian Cruise Line expects earnings per share (excluding special items) of approximately 52 cents in the first quarter of 2018. The Zacks Consensus Estimate is pegged at 47 cents per share.

For full-year 2018, the company anticipates earnings (excluding special items) in the band of $4.45 to $4.65. The Zacks Consensus Estimate of $4.59 per share lies within the company’s guidance range. Fuel price per metric ton, net of hedges, is projected at $450 and $465 for first-quarter and full-year 2018, respectively.

Zacks Rank & Key Picks

Norwegian Cruise Line carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Consumer Discretionary sector are Cinemark Holdings, Inc. (CNK - Free Report) and Viacom Inc. carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Cinemark Holdings and Viacom have gained 17.5% and 23.8%, respectively, in the last three months.

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