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Norwegian Cruise (NCLH) Posts Wider-Than-Expected Q4 Loss
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Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported weak fourth-quarter 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. Following the results, the company’s shares are down 8% in the pre-market trading session.
The company continues to execute phased relaunch plans for all 28 ships. The company was operating at nearly 70% of its capacity by the end of fourth-quarter 2021. In the quarter under review, occupancy was 51.4%. Norwegian Cruise anticipates operating at 85% capacity by the end of first-quarter 2022 and full fleet operation is expected by early second-quarter 2022.
Frank Del Rio, president and CEO of Norwegian Cruise, stated, “These last few months have also had their share of challenges caused by the impacts from the Delta and Omicron COVID surges, but despite these challenges which were mostly out of our control, our booked position and pricing remain strong, particularly for the second half of 2022 and into 2023, demonstrating the strong fundamental demand for our cruise offerings.”
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $1.95, wider than the Zacks Consensus Estimate of a loss of $1.69. In the prior-year quarter, the company reported a loss per share of $2.33.
Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise
Quarterly revenues of $487.4 million lagged the consensus mark of $585 million. In the prior-year quarter, the company had reported revenues of $9.6 million. The upside can primarily be attributed to the resumption of cruise operations. In the quarter under review, passenger ticket revenues were $304.9 million compared with $7.8 million reported in the prior-year quarter. Onboard and other revenues increased to $182.6 million from $1.8 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 246.7% in 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 fourth quarter increased 151.9% year over year to $991.3 million. Adjusted net cruise costs (excluding fuel) amounted to $701.6 million compared with $307.6 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $737 from $574 in 2020.
Net interest expenses in the quarter were $950 million, up from $159.2 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Dec 31, 2021, were $1.5 billion compared with $3.3 billion at the end of Dec 31, 2020. Long-term debt as of Dec 31, 2021, came in at $11.6 billion compared with $11.7 billion as of Dec 31, 2020.
The company's monthly average cash burn for fourth-quarter 2021 was approximately $345 million compared with $275 million in the previous quarter. The figure, however, was below the prior guidance of $350 million. For first-quarter 2022, it expects the average cash burn rate to temporarily remain elevated at approximately $390 million per month due to the phased relaunch of additional vessels.
2021 Highlights
Total revenues in 2021 came in at $648 million compared with $1,279.9 million reported in 2020.
Total cruise operating expense in 2021 came in at $1,608 million compared with $1,693 million reported in 2020.
In 2021, adjusted earnings per share (EPS) came in at $(8.07) compared with $(8.64) reported in the previous year.
Other Updates
During the later part of fourth-quarter 2021, the company witnessed a slowdown in booking activity, primarily due to the Omicron variant of COVID-19. Due to this, the cumulative booked position for the first half of 2022 fell below 2019 levels. The bookings include the incorporation of higher pricing and the dilutive impact of future cruise credits (FCCs). As of Dec 31, the company’s advance ticket sales (including the long-term portion) were $1.8 billion. The amount includes FCCs worth approximately $0.7 billion.
With cases subsiding, the company reported sequential improvements in net booking volumes and stated that bookings for the second half of 2022 are in line with 2019 levels. The company stated that bookings for 2023 remained strong compared with 2020 and 2019 levels.
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The Zacks Consensus Estimate for MAR’s 2022 sales and EPS suggests growth of 40.3% and 73%, respectively, from the year-ago period’s levels.
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The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.6% and 22.1%, respectively, from the year-ago period’s levels.
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The Zacks Consensus Estimate for FUN’s 2022 sales and EPS suggests growth of 32.6% and 612.7%, respectively, from the year-ago period’s levels.
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Norwegian Cruise (NCLH) Posts Wider-Than-Expected Q4 Loss
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported weak fourth-quarter 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. Following the results, the company’s shares are down 8% in the pre-market trading session.
The company continues to execute phased relaunch plans for all 28 ships. The company was operating at nearly 70% of its capacity by the end of fourth-quarter 2021. In the quarter under review, occupancy was 51.4%. Norwegian Cruise anticipates operating at 85% capacity by the end of first-quarter 2022 and full fleet operation is expected by early second-quarter 2022.
Frank Del Rio, president and CEO of Norwegian Cruise, stated, “These last few months have also had their share of challenges caused by the impacts from the Delta and Omicron COVID surges, but despite these challenges which were mostly out of our control, our booked position and pricing remain strong, particularly for the second half of 2022 and into 2023, demonstrating the strong fundamental demand for our cruise offerings.”
Earnings & Revenue Discussion
Norwegian Cruise reported an adjusted loss per share of $1.95, wider than the Zacks Consensus Estimate of a loss of $1.69. In the prior-year quarter, the company reported a loss per share of $2.33.
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
Quarterly revenues of $487.4 million lagged the consensus mark of $585 million. In the prior-year quarter, the company had reported revenues of $9.6 million. The upside can primarily be attributed to the resumption of cruise operations. In the quarter under review, passenger ticket revenues were $304.9 million compared with $7.8 million reported in the prior-year quarter. Onboard and other revenues increased to $182.6 million from $1.8 million reported in the prior-year quarter.
Expenses & Operating Results
Total cruise operating expenses increased 246.7% in 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 fourth quarter increased 151.9% year over year to $991.3 million. Adjusted net cruise costs (excluding fuel) amounted to $701.6 million compared with $307.6 million in the prior-year quarter. Fuel price per metric ton (net of hedges) increased to $737 from $574 in 2020.
Net interest expenses in the quarter were $950 million, up from $159.2 million in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Dec 31, 2021, were $1.5 billion compared with $3.3 billion at the end of Dec 31, 2020. Long-term debt as of Dec 31, 2021, came in at $11.6 billion compared with $11.7 billion as of Dec 31, 2020.
The company's monthly average cash burn for fourth-quarter 2021 was approximately $345 million compared with $275 million in the previous quarter. The figure, however, was below the prior guidance of $350 million. For first-quarter 2022, it expects the average cash burn rate to temporarily remain elevated at approximately $390 million per month due to the phased relaunch of additional vessels.
2021 Highlights
Total revenues in 2021 came in at $648 million compared with $1,279.9 million reported in 2020.
Total cruise operating expense in 2021 came in at $1,608 million compared with $1,693 million reported in 2020.
In 2021, adjusted earnings per share (EPS) came in at $(8.07) compared with $(8.64) reported in the previous year.
Other Updates
During the later part of fourth-quarter 2021, the company witnessed a slowdown in booking activity, primarily due to the Omicron variant of COVID-19. Due to this, the cumulative booked position for the first half of 2022 fell below 2019 levels. The bookings include the incorporation of higher pricing and the dilutive impact of future cruise credits (FCCs). As of Dec 31, the company’s advance ticket sales (including the long-term portion) were $1.8 billion. The amount includes FCCs worth approximately $0.7 billion.
With cases subsiding, the company reported sequential improvements in net booking volumes and stated that bookings for the second half of 2022 are in line with 2019 levels. The company stated that bookings for 2023 remained strong compared with 2020 and 2019 levels.
Zacks Rank & Key Picks
Norwegian Cruise currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks from the Zacks Consumer Discretionary sector are Marriott International, Inc. (MAR - Free Report) , Crocs, Inc. (CROX - Free Report) , and Cedar Fair, L.P. (FUN - Free Report) .
Marriott flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 86.6%, on average. Shares of Marriott have increased 12% in the past year.
The Zacks Consensus Estimate for MAR’s 2022 sales and EPS suggests growth of 40.3% and 73%, respectively, from the year-ago period’s levels.
Crocs flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 36%, on average. Shares of Crocs have increased 5.6% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.6% and 22.1%, respectively, from the year-ago period’s levels.
Cedar Fair flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 16.3%, on average. Shares of Cedar Fair have gained 15.7% in the past year.
The Zacks Consensus Estimate for FUN’s 2022 sales and EPS suggests growth of 32.6% and 612.7%, respectively, from the year-ago period’s levels.