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Norwegian Cruise (NCLH) Gains on US Sailing Resumption Plan
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Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) recently outlined a plan to resume operations from the U.S. ports in July and sent it to the U.S. Centers for Disease Control and Prevention (“CDC”) for approval. Following the news, the company’s shares increased 7.2% on Apr 5. Notably, the company’s shares have gained 20.4% in the past three months, compared with the industry’s rally of 14.5%.
The company announced that the plan include includes its multi-layered SailSAFE Health and Safety Program. During third-quarter 2020, the company collaborated with Royal Caribbean Cruises Ltd. (RCL - Free Report) to form the “Healthy Sail Panel.” The panel provided 74 specific recommendations (that includes a combination of scientific protocols and procedures) to reduce risks triggered by the coronavirus pandemic. This comprises COVID-19 testing of all guests and crew, application of face masks, physical distancing requirements and controlled shore excursions.
Moreover, the company’s plan is in line with the CDC’s updated guidance that international travel is safe for fully vaccinated persons. Despite the coronavirus pandemic, the cruise industry has successfully carried approximately 400,000 passengers in over 10 major cruise markets outside the United States.
Frank Del Rio, president and chief executive officer of Norwegian Cruise Line said “Our robust and comprehensive SailSAFE health and safety program extends well beyond the protocols of the travel, leisure and hospitality sectors, all of which have already reopened including hotels and resorts, casinos, restaurants, sporting venues, theme parks and airlines.”
The company is planning to commence U.S. sailings at 60% capacity and then gradually increase it to 80% and 100% in August and September, respectively.
Pandemic Induced Cash Burn Remains a Major Woe
Norwegian Cruise is bearing the brunt of high expenses for quite some time now. Costs associated with the suspension of cruise voyages and continued payment of protected commissions and crew salaries are adding to woes. The company experienced a cash burn of approximately $190 million a month, on average during fourth-quarter 2020, 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.
A better-ranked stock in the same space is Camping World Holdings, Inc. (CWH - Free Report) , which sports a Zacks Rank #1.
Camping World Holdings’ 2021 earnings are expected to surge 20.5%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Norwegian Cruise (NCLH) Gains on US Sailing Resumption Plan
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) recently outlined a plan to resume operations from the U.S. ports in July and sent it to the U.S. Centers for Disease Control and Prevention (“CDC”) for approval. Following the news, the company’s shares increased 7.2% on Apr 5. Notably, the company’s shares have gained 20.4% in the past three months, compared with the industry’s rally of 14.5%.
The company announced that the plan include includes its multi-layered SailSAFE Health and Safety Program. During third-quarter 2020, the company collaborated with Royal Caribbean Cruises Ltd. (RCL - Free Report) to form the “Healthy Sail Panel.” The panel provided 74 specific recommendations (that includes a combination of scientific protocols and procedures) to reduce risks triggered by the coronavirus pandemic. This comprises COVID-19 testing of all guests and crew, application of face masks, physical distancing requirements and controlled shore excursions.
Moreover, the company’s plan is in line with the CDC’s updated guidance that international travel is safe for fully vaccinated persons. Despite the coronavirus pandemic, the cruise industry has successfully carried approximately 400,000 passengers in over 10 major cruise markets outside the United States.
Frank Del Rio, president and chief executive officer of Norwegian Cruise Line said “Our robust and comprehensive SailSAFE health and safety program extends well beyond the protocols of the travel, leisure and hospitality sectors, all of which have already reopened including hotels and resorts, casinos, restaurants, sporting venues, theme parks and airlines.”
The company is planning to commence U.S. sailings at 60% capacity and then gradually increase it to 80% and 100% in August and September, respectively.
Pandemic Induced Cash Burn Remains a Major Woe
Norwegian Cruise is bearing the brunt of high expenses for quite some time now. Costs associated with the suspension of cruise voyages and continued payment of protected commissions and crew salaries are adding to woes. The company experienced a cash burn of approximately $190 million a month, on average during fourth-quarter 2020, 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.
Zacks Rank & a Key Pick
Norwegian Cruise — which shares space with Carnival Corporation & Plc (CCL - Free Report) in the Zacks Leisure and Recreation Services industry — has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock in the same space is Camping World Holdings, Inc. (CWH - Free Report) , which sports a Zacks Rank #1.
Camping World Holdings’ 2021 earnings are expected to surge 20.5%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>