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Why Is Norwegian Cruise Line (NCLH) Down 1.8% 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 1.8% 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 Q1 Earnings & Revenues Miss Estimates
Norwegian Cruise reported first-quarter 2022 results, wherein earnings and revenues missed the Zacks Consensus Estimate. However, both the metrics improved year over year.
On May 7, 2022, the company completed its phased fleet relaunch, and its entire 28-ship fleet is now operating. Norwegian Cruise was operating at nearly 85% of its capacity by the end of first-quarter 2022. In the quarter under review, occupancy was 48% due to the impact of the Omicron variant. In second-quarter 2022, the company anticipates operating cash flow to be positive.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $1.82, wider than the Zacks Consensus Estimate of a loss of $1.73. In the prior-year quarter, the company reported a loss per share of $2.03.
Quarterly revenues of $521.9 million lagged the consensus mark of $655 million. In the prior-year quarter, the company had reported revenues of $3.1 million. The upside can primarily be attributed to the resumption of cruise operations. In the quarter under review, passenger ticket revenues were $342.5 million compared with $0.2 million reported in the prior-year quarter. Onboard and other revenues increased to $179.5 million from $2.9 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 266.1% in the quarter under review from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from the resumption of cruise voyages. The company noted that the increase in 2022 reflects an improvement in payroll, fuel, and direct variable costs of fully operating ships.
Gross cruise costs in the fourth quarter increased 155.3% year over year to $1,031.6 million. Adjusted net cruise costs (excluding fuel) amounted to $742.1 million compared with $323.6 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $724 from $590 in 2021.
Net interest expenses in the quarter were $327.7 million, down from $824.4 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Mar 31, 2022, were $2.1 billion compared with $1.5 billion at the end of Dec 31, 2021. Long-term debt as of Mar 31, 2022, came in at $12.6 billion compared with $11.6 billion as of Dec 31, 2021.
The company's monthly average cash burn for first-quarter 2022 was approximately $375 million compared with $345 million in the previous quarter. The figure, however, was below the prior guidance of $390 million.
Outlook& Booking Updates
Due to the coronavirus pandemic and the Russia-Ukraine conflict, the company is unable to estimate the impact on its business. The company expects to report net loss for second-quarter 2022. In second-quarter 2022, it anticipates net interest expenses to be nearly $155 million. For the full year, it expects the same to be $605 million, excluding losses on extinguishment of debt. Depreciation and amortization is forecast to be roughly $180 million for the second quarter of 2022 and $750 million for the full year of 2022.
Due to the prevailing scenario, Its current cumulative booked position for the second half of 2022 is below the comparable 2019 period. The company stated that bookings for 2023 remained strong compared with 2020 and 2019 levels.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -14.67% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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.
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 - Free Report) , a stock from the same industry, has gained 12.8%. The company reported its results for the quarter ended March 2022 more than a month ago.
Live Nation reported revenues of $1.8 billion in the last reported quarter, representing a year-over-year change of +520.4%. EPS of -$0.39 for the same period compares with -$1.44 a year ago.
For the current quarter, Live Nation is expected to post earnings of $0.53 per share, indicating a change of +158.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -8.7% over the last 30 days.
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.
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Why Is Norwegian Cruise Line (NCLH) Down 1.8% 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 1.8% 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 Q1 Earnings & Revenues Miss Estimates
Norwegian Cruise reported first-quarter 2022 results, wherein earnings and revenues missed the Zacks Consensus Estimate. However, both the metrics improved year over year.
On May 7, 2022, the company completed its phased fleet relaunch, and its entire 28-ship fleet is now operating. Norwegian Cruise was operating at nearly 85% of its capacity by the end of first-quarter 2022. In the quarter under review, occupancy was 48% due to the impact of the Omicron variant. In second-quarter 2022, the company anticipates operating cash flow to be positive.
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $1.82, wider than the Zacks Consensus Estimate of a loss of $1.73. In the prior-year quarter, the company reported a loss per share of $2.03.
Quarterly revenues of $521.9 million lagged the consensus mark of $655 million. In the prior-year quarter, the company had reported revenues of $3.1 million. The upside can primarily be attributed to the resumption of cruise operations. In the quarter under review, passenger ticket revenues were $342.5 million compared with $0.2 million reported in the prior-year quarter. Onboard and other revenues increased to $179.5 million from $2.9 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 266.1% in the quarter under review from the year-ago quarter’s levels. The company’s expenses in the quarter primarily stemmed from the resumption of cruise voyages. The company noted that the increase in 2022 reflects an improvement in payroll, fuel, and direct variable costs of fully operating ships.
Gross cruise costs in the fourth quarter increased 155.3% year over year to $1,031.6 million. Adjusted net cruise costs (excluding fuel) amounted to $742.1 million compared with $323.6 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $724 from $590 in 2021.
Net interest expenses in the quarter were $327.7 million, down from $824.4 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Mar 31, 2022, were $2.1 billion compared with $1.5 billion at the end of Dec 31, 2021. Long-term debt as of Mar 31, 2022, came in at $12.6 billion compared with $11.6 billion as of Dec 31, 2021.
The company's monthly average cash burn for first-quarter 2022 was approximately $375 million compared with $345 million in the previous quarter. The figure, however, was below the prior guidance of $390 million.
Outlook& Booking Updates
Due to the coronavirus pandemic and the Russia-Ukraine conflict, the company is unable to estimate the impact on its business. The company expects to report net loss for second-quarter 2022. In second-quarter 2022, it anticipates net interest expenses to be nearly $155 million. For the full year, it expects the same to be $605 million, excluding losses on extinguishment of debt. Depreciation and amortization is forecast to be roughly $180 million for the second quarter of 2022 and $750 million for the full year of 2022.
Due to the prevailing scenario, Its current cumulative booked position for the second half of 2022 is below the comparable 2019 period. The company stated that bookings for 2023 remained strong compared with 2020 and 2019 levels.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -14.67% due to these changes.
VGM Scores
At this time, Norwegian Cruise Line has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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.
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 - Free Report) , a stock from the same industry, has gained 12.8%. The company reported its results for the quarter ended March 2022 more than a month ago.
Live Nation reported revenues of $1.8 billion in the last reported quarter, representing a year-over-year change of +520.4%. EPS of -$0.39 for the same period compares with -$1.44 a year ago.
For the current quarter, Live Nation is expected to post earnings of $0.53 per share, indicating a change of +158.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -8.7% over the last 30 days.
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.