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Why Is Norwegian Cruise Line (NCLH) Down 28.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Norwegian Cruise Line (NCLH - Free Report) . Shares have lost about 28.6% 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 catalysts.
Norwegian Cruise Posts Wider-Than-Expected Q3 Loss
Norwegian Cruise reported weak third-quarter 2021 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
The company continues to execute phased relaunch plans for all 28 ships. The company was operating at nearly 40% of its capacity by the end of the third quarter of 2021. In the quarter under review, occupancy was 57.4%. Norwegian Cruise anticipates operating at 75% capacity by the end of 2021 and full fleet operation is expected by April 1, 2022. It’s 11 ships have resumed operations to date.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $2.17, wider than the Zacks Consensus Estimate of a loss of $2.11. In the prior-year quarter, the company reported a loss per share of $2.35.
Revenues of $153.1 million lagged the consensus mark of $190 million. In the prior-year quarter, the company had reported revenues of $6.5 million. The upside can primarily be attributed to resumption of cruise operations. In the quarter under review, passenger ticket revenues were $86.1 million compared with $4.7 million in the prior-year quarter. Onboard and other revenues increased to $67 million from $1.2 million.
Expenses & Operating Results
Total cruise operating expenses increased 131.3% for the quarter under review from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from crew costs, which include salaries, food and other repatriation costs, fuel, and other ongoing expenses such as insurance and ship maintenance.
Gross cruise costs in the third quarter were up 92.9% year over year to $668.9 million. Adjusted net cruise costs (excluding fuel) amounted to $497.2 million compared with $494.7 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $693 from $592 in 2020.
Net interest expenses in the quarter were $161.2 million, up from $139.7 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Sep 30, 2021 were $1.9 billion, up from $3.3 billion at the end of Dec 31, 2020. Long-term debt as of Sep 30, 2021 was $11.9 billion compared with $11.7 billion as of Dec 31, 2021.
The company's monthly average cash burn for third-quarter 2021 was approximately $275 million compared with $200 million in the previous quarter. The figure, however, was below the prior guidance of $285 million. For fourth-quarter 2021, it expects the average cash burn rate to temporarily remain elevated at approximately $350 million per month due to the phased relaunch of additional vessels.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -20.84% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 28.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Norwegian Cruise Line (NCLH - Free Report) . Shares have lost about 28.6% 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 catalysts.
Norwegian Cruise Posts Wider-Than-Expected Q3 Loss
Norwegian Cruise reported weak third-quarter 2021 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
The company continues to execute phased relaunch plans for all 28 ships. The company was operating at nearly 40% of its capacity by the end of the third quarter of 2021. In the quarter under review, occupancy was 57.4%. Norwegian Cruise anticipates operating at 75% capacity by the end of 2021 and full fleet operation is expected by April 1, 2022. It’s 11 ships have resumed operations to date.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $2.17, wider than the Zacks Consensus Estimate of a loss of $2.11. In the prior-year quarter, the company reported a loss per share of $2.35.
Revenues of $153.1 million lagged the consensus mark of $190 million. In the prior-year quarter, the company had reported revenues of $6.5 million. The upside can primarily be attributed to resumption of cruise operations. In the quarter under review, passenger ticket revenues were $86.1 million compared with $4.7 million in the prior-year quarter. Onboard and other revenues increased to $67 million from $1.2 million.
Expenses & Operating Results
Total cruise operating expenses increased 131.3% for the quarter under review from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from crew costs, which include salaries, food and other repatriation costs, fuel, and other ongoing expenses such as insurance and ship maintenance.
Gross cruise costs in the third quarter were up 92.9% year over year to $668.9 million. Adjusted net cruise costs (excluding fuel) amounted to $497.2 million compared with $494.7 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $693 from $592 in 2020.
Net interest expenses in the quarter were $161.2 million, up from $139.7 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Sep 30, 2021 were $1.9 billion, up from $3.3 billion at the end of Dec 31, 2020. Long-term debt as of Sep 30, 2021 was $11.9 billion compared with $11.7 billion as of Dec 31, 2021.
The company's monthly average cash burn for third-quarter 2021 was approximately $275 million compared with $200 million in the previous quarter. The figure, however, was below the prior guidance of $285 million. For fourth-quarter 2021, it expects the average cash burn rate to temporarily remain elevated at approximately $350 million per month due to the phased relaunch of additional vessels.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -20.84% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.