Norwegian Cruise (NCLH) Posts Narrower-than-Expected Q1 Loss

Norwegian Cruise Line Holdings Ltd. NCLH reported first-quarter 2021 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Following the results, the company’s shares fell nearly 2% in pre-market trading session.

Frank Del Rio, president and CEO of Norwegian Cruise Line said “As for the resumption of cruises from the U.S., we continue to engage in dialogue with the U.S. Centers for Disease Control and Prevention. Our team is working through the recently issued and modified technical guidance for which additional clarification is needed on how the incorporation of vaccine requirements impacts the Conditional Sail Order and our path forward.”

Norwegian Cruise Line will provide seven-day cruises to the Greek Isles on Norwegian Jade from Athens (Piraeus), Greece starting Jul 25, 2021. Moreover, Oceania Cruises will commence cruise operations with Marina in August. Meanwhile, Regent Seven Seas Cruises will restart sailing with Seven Seas Splendor cruising from the U.K. starting Sep 11, 2021.

Norwegian Cruise Line Holdings Ltd. Price, Consensus and EPS Surprise

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

Earnings & Revenue Discussion

Norwegian Cruise reported adjusted loss per share of $2.03, narrower than the Zacks Consensus Estimate of a loss of $2.06. Notably, the company reported loss per share of 99 cents in the prior-year quarter.

Revenues of $3.1 million lagged the consensus of $10 million. The bottom line also slumped 99.8% year over year. The downside can be attributed to a decline of 99.9% and 99.3% in passenger ticket revenues, and onboard and other revenues, respectively.

Expenses & Operating Results

Total cruise operating expenses plunged 79.8% 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 fell 68.1% from the prior-year quarter. Adjusted net cruise costs (excluding fuel) per capacity day were down 53.7% year over year at constant currency. Fuel price per metric ton (net of hedges) declined to $590 from $614 million.

Net interest expenses were $824.4 million for the first quarter, up from $68.9 million in the year-ago period.

Balance Sheet

Cash and cash equivalents as of Mar 31, 2021 were $3.5 billion, up from $3.3 billion at the end of Dec 31, 2020. Long-term debt at 2020-end totaled $12.2 billion, higher than $11.7 billion at the end of 2020.

The company's monthly average cash burn for first-quarter 2021 was approximately $190 million. For second-quarter 2021, it expects the average cash burn rate to temporarily remain elevated at approximately $190 million per month.

Zacks Rank & a Stock to Consider

Norwegian Cruise, which shares space with Royal Caribbean Cruises Ltd RCL and Carnival Corporation & plc CCL, currently carries a Zacks Rank #3 (Hold).

A better-ranked stocks worth considering in the same space include WW International, Inc WW carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

WW International has an impressive long-term earnings growth rate of 15%.

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