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Norwegian Cruise Line (NCLH) Up 1.4% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) . Shares have added about 1.4% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is NCLH due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

First-quarter earnings

The company’s earnings (excluding $0.15 from non-recurring items) of $0.60  per share outpaced the Zacks Consensus Estimate of $0.54. The bottom line also increased 50% on a year-over-year basis. Higher revenues aided the quarterly results.

Revenues came in at $1,293.4 million, which surpassed the Zacks Consensus Estimate of $1,286.5 million and improved 12.4% on a year-over-year basis. The upside was aided by a 13.1% increase in passenger ticket revenues to $889.87 million. The same from onboard and other sources was up 10.8% on a year-over-year basis to $403.54 million. Gross yield (total revenue per Capacity Day) increased 1.4% in the quarter on a year-over-year basis.

Net yield grew 1% on a constant-currency basis. The measure was up 2% on a reported basis. Fuel price per metric ton decreased marginally to $448 in the reported quarter. Total cruise operating expenses were up 6.7% to $768.11 million, courtesy of the 10.8% increase in Capacity Days.

Marketing, general and administrative expenses also increased year over year to $227.1 million. Gross Cruise Costs (sum of cruise operating expenses and marketing, general and administrative cost) per Capacity Day declined marginally in the first quarter  due to a reduction in expenses on maintenance and repairs.

Outlook

Norwegian Cruise Line expects earnings per share (excluding special items) of approximately $1.02 in the second quarter of 2018. For 2018, the company anticipates earnings per share (excluding special items) in the band of $4.55-$4.70.  Fuel price per metric ton, net of hedges, is projected at $470 for the second-quarter and 2018.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There have been three revisions higher for the current quarter compared to three lower.

Norwegian Cruise Line Holdings Ltd. Price and Consensus

 

VGM Scores

At this time, NCLH has a nice Growth Score of B, though it is lagging a lot on the momentum front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stocks has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for value investors than growth investors.

Outlook

NCLH has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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