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Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported fourth-quarter 2020 results, wherein the bottom and top lines missed the respective Zacks Consensus Estimate. Nonetheless, the company has been witnessing strong 2022 bookings, as people look forward to post-vaccination vacations.
Notably, positive investor sentiments were witnessed as its shares climbed more than 5% during the pre-market trading session on Feb 25.
Earnings & Revenue Discussion
Norwegian Cruise reported adjusted loss per share of $2.33, wider than the Zacks Consensus Estimate of a loss of $2.31. Notably, the company reported earnings per share of 73 cents in the prior-year quarter.
Revenues of $9.6 million missed the consensus mark by 2.5%. Furthermore, the figure declined 99.4% year over year. The downside can be attributed to a decline of 99.2% and 99.6% in passenger ticket revenues, and onboard and other revenues, respectively.
Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise
Total cruise operating expenses plunged 76.7% for the quarter under review from the year-ago period. The company’s expenses for 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 per capacity day declined 64.8% from the prior-year quarter. Adjusted net cruise costs (excluding fuel) per capacity day were down 51.9% year over year at constant currency. Fuel price per metric ton (net of hedges) was up 13% from the year-ago quarter to $574 for the quarter under review.
Net interest expenses were $159.2 million for the fourth quarter, up from $73.2 million in the year-ago period.
2020 Highlights
Total revenues decreased 80.2% from the prior-year figure to $1,279.9 million, thanks to cancellation of the vast majority of sailings in 2020 due to the COVID-19 pandemic, which in turn resulted in a 78.6% decrease in capacity days.
Norwegian Cruise reported adjusted net loss of $8.64 per share for 2020. Adjusted earnings of $5.09 per share were recorded in 2019.
Balance Sheet
Cash and cash equivalents as of Dec 31, 2020 were $3.3 billion, up from $252.9 million in the corresponding period of 2019. Long-term debt at 2020-end totaled $11.7 billion, higher than $6.1 billion at the end of 2019.
The company's monthly average cash burn for fourth-quarter 2020 was approximately $190 million, which included $15 million per month of additional relaunch-related expenses. For first-quarter 2021, it expects the average cash burn rate to temporarily remain elevated at approximately $190 million per month, or $170 million — excluding non-recurring debt modification costs — as it ramps down relaunch-related expenses and repatriates crew.
Outlook
Norwegian Cruise expects to report net loss, both on GAAP and adjusted basis, for first-quarter 2021. The company expects to report net loss until it resumes voyages. While overall booking volumes remain below historical levels, it has been registering solid demand for future cruise vacations. Despite reduced sales and marketing investments, bookings have been strong, resulting in an elongated booking window, with guests booking further into the future. Although the company’s overall cumulative booked position for second-half 2021 remains below historical levels, its pricing for the said period is in line with the pre-pandemic level (even after including the dilutive impact of future cruise credits).
Zacks Rank & Stock to Consider
Norwegian Cruise, which shares space with Royal Caribbean Cruises Ltd. (RCL - Free Report) and Carnival Corporation & Plc (CCL - Free Report) in the same industry, currently carries a Zacks Rank #3 (Hold).
Camping World Holdings has an impressive long-term earnings growth rate of 34.7%.
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Image: Bigstock
Norwegian Cruise (NCLH) Q4 Earnings Lag, Bookings Drive Stock
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported fourth-quarter 2020 results, wherein the bottom and top lines missed the respective Zacks Consensus Estimate. Nonetheless, the company has been witnessing strong 2022 bookings, as people look forward to post-vaccination vacations.
Notably, positive investor sentiments were witnessed as its shares climbed more than 5% during the pre-market trading session on Feb 25.
Earnings & Revenue Discussion
Norwegian Cruise reported adjusted loss per share of $2.33, wider than the Zacks Consensus Estimate of a loss of $2.31. Notably, the company reported earnings per share of 73 cents in the prior-year quarter.
Revenues of $9.6 million missed the consensus mark by 2.5%. Furthermore, the figure declined 99.4% year over year. The downside can be attributed to a decline of 99.2% and 99.6% in passenger ticket revenues, and onboard and other revenues, respectively.
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
Expenses & Operating Results
Total cruise operating expenses plunged 76.7% for the quarter under review from the year-ago period. The company’s expenses for 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 per capacity day declined 64.8% from the prior-year quarter. Adjusted net cruise costs (excluding fuel) per capacity day were down 51.9% year over year at constant currency. Fuel price per metric ton (net of hedges) was up 13% from the year-ago quarter to $574 for the quarter under review.
Net interest expenses were $159.2 million for the fourth quarter, up from $73.2 million in the year-ago period.
2020 Highlights
Total revenues decreased 80.2% from the prior-year figure to $1,279.9 million, thanks to cancellation of the vast majority of sailings in 2020 due to the COVID-19 pandemic, which in turn resulted in a 78.6% decrease in capacity days.
Norwegian Cruise reported adjusted net loss of $8.64 per share for 2020. Adjusted earnings of $5.09 per share were recorded in 2019.
Balance Sheet
Cash and cash equivalents as of Dec 31, 2020 were $3.3 billion, up from $252.9 million in the corresponding period of 2019. Long-term debt at 2020-end totaled $11.7 billion, higher than $6.1 billion at the end of 2019.
The company's monthly average cash burn for fourth-quarter 2020 was approximately $190 million, which included $15 million per month of additional relaunch-related expenses. For first-quarter 2021, it expects the average cash burn rate to temporarily remain elevated at approximately $190 million per month, or $170 million — excluding non-recurring debt modification costs — as it ramps down relaunch-related expenses and repatriates crew.
Outlook
Norwegian Cruise expects to report net loss, both on GAAP and adjusted basis, for first-quarter 2021. The company expects to report net loss until it resumes voyages. While overall booking volumes remain below historical levels, it has been registering solid demand for future cruise vacations. Despite reduced sales and marketing investments, bookings have been strong, resulting in an elongated booking window, with guests booking further into the future. Although the company’s overall cumulative booked position for second-half 2021 remains below historical levels, its pricing for the said period is in line with the pre-pandemic level (even after including the dilutive impact of future cruise credits).
Zacks Rank & Stock to Consider
Norwegian Cruise, which shares space with Royal Caribbean Cruises Ltd. (RCL - Free Report) and Carnival Corporation & Plc (CCL - Free Report) in the same industry, currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the same space is Camping World Holdings, Inc. (CWH - Free Report) , carrying a Zacks Rank #2 (Buy) at present. 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%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>