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Norwegian Cruise (NCLH) Q3 Earnings Top Estimates, Rise Y/Y
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Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported mixed third-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by strong demand from target upmarket consumers and ongoing margin enhancement initiatives.
The company cautiously monitors short-term expectations amidst global economic and geopolitical shifts. Despite this, NCLH remains optimistic due to its strong forward bookings and robust pricing to sustain this positive momentum through the end of 2023.
Following the results, the company’s shares dropped 0.74% in the pre-market trading session on Nov 1.
Earnings & Revenue Discussion
Norwegian Cruise reported adjusted earnings per share of 76 cents, beating the Zacks Consensus Estimate of adjusted earnings of 69 cents per share by 10.1%. In the prior-year quarter, the company reported an adjusted loss per share of 64 cents. The upside was backed by solid revenue performance and continued focus on cost reduction.
Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise
Quarterly revenues of $2,536 million missed the consensus mark of $2,543 million. In the prior-year quarter, the company reported revenues of $1,615.5 million. The upside can be attributed to solid occupancy and pricing growth.
In the quarter under review, passenger ticket revenues were $1,733.6 million compared with $1,105.9 million reported in the prior-year quarter. Our model suggested passenger ticket revenues to be $1,767.3 million. Onboard and other revenues increased to $802.4 million from $509.6 million reported in the prior-year quarter. We expected onboard and other revenues to be $756.4 million.
Expenses & Operating Results
Total cruise operating expenses increased 19.7% 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 and inflationary pressures. The company reported a rise in payroll, fuel and direct variable costs of fully-operating ships.
During the third quarter, gross cruise costs dropped 0.3% (from 2019 levels) to $1,808.1 million. Adjusted net cruise costs (excluding fuel) amounted to $878.4 million compared with $882.2 million in the third quarter of 2019. Fuel price per metric ton (net of hedges) fell to $727 from $830 in 2022.
Net interest expenses in the quarter were $181.2 million compared with $152.3 million reported in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Sep 30, 2023, were $681.6 million compared with $947 million at the end of Dec 31, 2022. Long-term debt came in at $12.6 billion, in line with 2022-end.
Booking Update
During the third quarter, the company faced operational challenges due to global events like the Maui wildfires and the Israel conflict. However, demand has improved in recent weeks and is now approaching normalized levels.
Also, it reported strength in advance ticket sales. As of Sep 30, 2023, the company’s advance ticket sales balance, including the long-term portion, came in at $2.97 billion, up 59% from 2019 levels. The company stated pricing levels to be elevated.
2023 Guidance
For the fourth quarter of 2023, the company anticipates occupancy to be approximately 98% and Capacity Days to be about 5.9 million. During the quarter, adjusted interest expense is expected at approximately $200 million, while depreciation and amortization are anticipated at approximately $215 million. Adjusted EBITDA is expected at nearly $360 million. For the fourth quarter, adjusted loss per share is projected to be nearly 15 cents.
For 2023, the company now anticipates occupancy to be approximately 102.6% compared with the prior projection of 103.5% and Capacity Days to be about 22.7 million. During the year, adjusted interest expenses are expected at approximately $730 million compared with the prior projection of $720 million. Depreciation and amortization are anticipated at nearly $810 million compared with the prior projection of $815 million. Adjusted EBITDA during the year is expected at nearly $1.86 billion. For 2023, adjusted EPS is projected to be nearly 73 cents compared with the prior projection of 80 cents.
Hasbro, Inc. (HAS - Free Report) reported mixed third-quarter fiscal 2023 results, with earnings coming in line with the Zacks Consensus Estimate and revenues missing the same. The top line fell short of the consensus estimate after beating it in the preceding two quarters.
Disappointing Consumer Products and Entertainment revenues hurt the company’s top line in the quarter under discussion. Following the results, the stock declined 13% in the pre-market trading session.
Leggett & Platt, Inc. (LEG - Free Report) reported tepid third-quarter 2023 results, with earnings and sales missing the Zacks Consensus Estimate.
The top and the bottom line declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2023 results, wherein earnings came in line with the Zacks Consensus Estimate, but revenues surpassed the same. Revenues beat the consensus estimate for the tenth straight quarter. Both metrics increased on a year-over-year basis.
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Norwegian Cruise (NCLH) Q3 Earnings Top Estimates, Rise Y/Y
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported mixed third-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by strong demand from target upmarket consumers and ongoing margin enhancement initiatives.
The company cautiously monitors short-term expectations amidst global economic and geopolitical shifts. Despite this, NCLH remains optimistic due to its strong forward bookings and robust pricing to sustain this positive momentum through the end of 2023.
Following the results, the company’s shares dropped 0.74% in the pre-market trading session on Nov 1.
Earnings & Revenue Discussion
Norwegian Cruise reported adjusted earnings per share of 76 cents, beating the Zacks Consensus Estimate of adjusted earnings of 69 cents per share by 10.1%. In the prior-year quarter, the company reported an adjusted loss per share of 64 cents. The upside was backed by solid revenue performance and continued focus on cost reduction.
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 $2,536 million missed the consensus mark of $2,543 million. In the prior-year quarter, the company reported revenues of $1,615.5 million. The upside can be attributed to solid occupancy and pricing growth.
In the quarter under review, passenger ticket revenues were $1,733.6 million compared with $1,105.9 million reported in the prior-year quarter. Our model suggested passenger ticket revenues to be $1,767.3 million. Onboard and other revenues increased to $802.4 million from $509.6 million reported in the prior-year quarter. We expected onboard and other revenues to be $756.4 million.
Expenses & Operating Results
Total cruise operating expenses increased 19.7% 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 and inflationary pressures. The company reported a rise in payroll, fuel and direct variable costs of fully-operating ships.
During the third quarter, gross cruise costs dropped 0.3% (from 2019 levels) to $1,808.1 million. Adjusted net cruise costs (excluding fuel) amounted to $878.4 million compared with $882.2 million in the third quarter of 2019. Fuel price per metric ton (net of hedges) fell to $727 from $830 in 2022.
Net interest expenses in the quarter were $181.2 million compared with $152.3 million reported in the year-ago quarter.
Balance Sheet
Cash and cash equivalents as of Sep 30, 2023, were $681.6 million compared with $947 million at the end of Dec 31, 2022. Long-term debt came in at $12.6 billion, in line with 2022-end.
Booking Update
During the third quarter, the company faced operational challenges due to global events like the Maui wildfires and the Israel conflict. However, demand has improved in recent weeks and is now approaching normalized levels.
Also, it reported strength in advance ticket sales. As of Sep 30, 2023, the company’s advance ticket sales balance, including the long-term portion, came in at $2.97 billion, up 59% from 2019 levels. The company stated pricing levels to be elevated.
2023 Guidance
For the fourth quarter of 2023, the company anticipates occupancy to be approximately 98% and Capacity Days to be about 5.9 million. During the quarter, adjusted interest expense is expected at approximately $200 million, while depreciation and amortization are anticipated at approximately $215 million. Adjusted EBITDA is expected at nearly $360 million. For the fourth quarter, adjusted loss per share is projected to be nearly 15 cents.
For 2023, the company now anticipates occupancy to be approximately 102.6% compared with the prior projection of 103.5% and Capacity Days to be about 22.7 million. During the year, adjusted interest expenses are expected at approximately $730 million compared with the prior projection of $720 million. Depreciation and amortization are anticipated at nearly $810 million compared with the prior projection of $815 million. Adjusted EBITDA during the year is expected at nearly $1.86 billion. For 2023, adjusted EPS is projected to be nearly 73 cents compared with the prior projection of 80 cents.
Zacks Rank & Recent Consumer Discretionary Releases
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.
Hasbro, Inc. (HAS - Free Report) reported mixed third-quarter fiscal 2023 results, with earnings coming in line with the Zacks Consensus Estimate and revenues missing the same. The top line fell short of the consensus estimate after beating it in the preceding two quarters.
Disappointing Consumer Products and Entertainment revenues hurt the company’s top line in the quarter under discussion. Following the results, the stock declined 13% in the pre-market trading session.
Leggett & Platt, Inc. (LEG - Free Report) reported tepid third-quarter 2023 results, with earnings and sales missing the Zacks Consensus Estimate.
The top and the bottom line declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2023 results, wherein earnings came in line with the Zacks Consensus Estimate, but revenues surpassed the same. Revenues beat the consensus estimate for the tenth straight quarter. Both metrics increased on a year-over-year basis.