Published on 29 Apr 2024 on Zacks via Yahoo Finance
How to Play Norwegian Cruise (NCLH) Ahead of Q1 Earnings?
Norwegian Cruise Line Holdings Ltd. NCLH is scheduled to report first-quarter 2024 results on May 1, before the opening bell.The Zacks Consensus Estimate for earnings is pegged at 12 cents per share. It reported an adjusted loss per share of 30 cents a year ago. The consensus mark for revenues is pegged at $2.24 billion, implying a 22.7% jump from the year-ago level.Robust demand for its Norwegian Cruise Line brand, record-high bookings and higher pricing levels are likely to have aided the company’s performance. Our model predicts passenger ticket revenues, and onboard and other revenues to improve 25.8% and 4.1%, respectively, from the year-ago levels to $1,520.4 million and $638.2 million. We expect occupancy to be 104.8%.The cruise industry giant's performance outlook appears promising, but investors must weigh potential risks against anticipated rewards before making investment decisions.
Booking & Fleet Expansion Drive Optimism
NCLH continues to benefit from robust booking. It is witnessing healthy demand across all markets, brands and products. Management intends to focus on strategic marketing efforts to drive demand and high-value bookings in the upcoming periods. For 2024, it expects healthy net yield growth of approximately 5.4% on a constant currency basis on the back of improved occupancy and pricing strength.Norwegian Cruise is constantly looking to expand its fleet size, which is currently at 32. In 2023, the company added three new world-class ships to its fleet, one for each of its three award-winning brands. It introduced Oceania Cruises Vista in May, Norwegian Viva in August and Regent Seven Seas Grandeur in November.It plans to introduce five more ships through 2028. For the Oceania Cruises brand, NCLH has one Allura Class Ships to be delivered in 2025. For the Norwegian brand, it has four Prima Class Ships on order, with scheduled delivery dates from 2025 through 2028. These additions are expected to increase its total berths to approximately 82,500.