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Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported third-quarter 2020 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line surpassed the same. Notably, both earnings and revenues declined sharply year over year due to cruises suspension on account of the coronavirus pandemic.
Earnings & Revenue Discussion
The company reported adjusted loss per share of $2.35, wider than the Zacks Consensus Estimate of a loss of $2.24. Notably, the company had reported earnings per share of $2.23 in the prior-year quarter.
Revenues of $6.5 million beat the consensus mark of $1 million. However, the figure declined 99.7% year over year. The downside can be attributed to decline of 99.7% and 99.7% in passenger ticket revenues and onboard and other revenues, respectively.
Expenses & Operating Results
Total cruise operating expenses plunged 80.8% in the quarter under review from the year-ago quarter. The company’s expenses in the quarter were primarily stemmed from crew costs, which include salaries, food and other repatriation costs, fuel, and other ongoing expenses such as insurance and ship maintenance.
Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise
Gross cruise costs per capacity day declined 72.2%. Adjusted Net cruise costs (excluding fuel) per Capacity Day were down 60.6% at cc. Fuel price per metric ton (net of hedges) was up 17.5% to $592 in the quarter under review.
Net interest expenses were $139.7 million in the third quarter, up from $60.2 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Sep 30, 2020, were $2.4 billion, up from $252.9 million as of Dec 31, 2019. Long-term debt at the end of the third quarter totaled $10.5 billion, higher than $6.1 billion at the end of 2019.
Due to the pandemic, the company’s monthly cash burn was on average, nearly $150 million per month. However, for the fourth quarter, the company anticipates monthly cash burn to be nearly $175 million owing to the timing of interest expense.
Outlook
The company has already withdrawn 2020 guidance on account of the temporary suspension of sailings globally. It expects to report net loss both on GAAP and adjusted basis for the fourth quarter and 2020. Since the beginning of the coronavirus outbreak, its bookings remained below historical levels. However, overall the company is witnessing demand for the second half of 2021.
Zacks Rank & a Stock to Consider
Norwegian Cruise, which shares space with Royal Caribbean Cruises Ltd (RCL - Free Report) and Carnival Corporation & Plc (CCL - Free Report) , carries a Zacks Rank #3 (Hold).
Camping World Holdings has an impressive long-term earnings growth rate of 34.7%.
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Norwegian Cruise (NCLH) Q3 Earnings Miss, Revenues Beat
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported third-quarter 2020 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line surpassed the same. Notably, both earnings and revenues declined sharply year over year due to cruises suspension on account of the coronavirus pandemic.
Earnings & Revenue Discussion
The company reported adjusted loss per share of $2.35, wider than the Zacks Consensus Estimate of a loss of $2.24. Notably, the company had reported earnings per share of $2.23 in the prior-year quarter.
Revenues of $6.5 million beat the consensus mark of $1 million. However, the figure declined 99.7% year over year. The downside can be attributed to decline of 99.7% and 99.7% in passenger ticket revenues and onboard and other revenues, respectively.
Expenses & Operating Results
Total cruise operating expenses plunged 80.8% in the quarter under review from the year-ago quarter. The company’s expenses in the quarter were primarily stemmed from crew costs, which include salaries, food and other repatriation costs, fuel, and other ongoing expenses such as insurance and ship maintenance.
Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise
Norwegian Cruise Line Holdings Ltd. price-consensus-eps-surprise-chart | Norwegian Cruise Line Holdings Ltd. Quote
Gross cruise costs per capacity day declined 72.2%. Adjusted Net cruise costs (excluding fuel) per Capacity Day were down 60.6% at cc. Fuel price per metric ton (net of hedges) was up 17.5% to $592 in the quarter under review.
Net interest expenses were $139.7 million in the third quarter, up from $60.2 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Sep 30, 2020, were $2.4 billion, up from $252.9 million as of Dec 31, 2019. Long-term debt at the end of the third quarter totaled $10.5 billion, higher than $6.1 billion at the end of 2019.
Due to the pandemic, the company’s monthly cash burn was on average, nearly $150 million per month. However, for the fourth quarter, the company anticipates monthly cash burn to be nearly $175 million owing to the timing of interest expense.
Outlook
The company has already withdrawn 2020 guidance on account of the temporary suspension of sailings globally. It expects to report net loss both on GAAP and adjusted basis for the fourth quarter and 2020. Since the beginning of the coronavirus outbreak, its bookings remained below historical levels. However, overall the company is witnessing demand for the second half of 2021.
Zacks Rank & a Stock to Consider
Norwegian Cruise, which shares space with Royal Caribbean Cruises Ltd (RCL - Free Report) and Carnival Corporation & Plc (CCL - Free Report) , carries a Zacks Rank #3 (Hold).
A better-ranked stock worth considering in the same space includes Camping World Holdings, Inc. (CWH - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Camping World Holdings has an impressive long-term earnings growth rate of 34.7%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>