Norwegian Cruise Line (NCLH) Q3 Earnings Beat, '18 EPS Up

Norwegian Cruise Line Holdings Ltd. NCLH performed very well in the third quarter of 2018, delivering better-than-expected earnings per share as well as revenues. The company’s earnings (excluding 16 cents from non-recurring items) of $2.27 per share outpaced the Zacks Consensus Estimate of $2.21. The bottom line also increased 22% on a year-over-year basis. Higher revenues aided the quarterly results.

Revenues came in at $1,858.36 million, which surpassed the Zacks Consensus Estimate of $1,838.3 million and improved 12.5% on a year-over-year basis. The upside was driven by an 11.9% increase in passenger ticket revenues to $1,334.46 million. The same from onboard and other sources was up approximately 14% on a year-over-year basis to $523.9 million. Gross yield (total revenue per Capacity Day) increased 4.5% in the quarter on a year-over-year basis.

Net yield grew 4% on a constant-currency basis. The measure was up 3.9% on a reported basis. Fuel price per metric ton (net of hedges) increased 7.1% to $510 in the quarter under review. Total cruise operating expenses were up 10.8% to $928.94 million due to a 7.6% rise in Capacity Days.

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. Quote

Also, marketing, general and administrative expenses rose 16.4% year over year to $235.44 million. Gross Cruise Costs (sum of cruise operating expenses and marketing, general and administrative cost) per Capacity Day increased 4% in the third quarter due to higher marketing, general and administrative expenses. The company repurchased shares worth more than $450 million in the first nine months of the year.

Q4 & 2018 Guidance

Norwegian Cruise Line expects earnings per share (excluding special items) of approximately 78 cents in the fourth quarter of 2018. The Zacks Consensus Estimate currently stands at 80 cents per share.

For 2018, the company anticipates earnings per share (excluding special items) to be $4.85 (earlier forecast: $4.70-$4.80). The Zacks Consensus Estimate of $4.81 per share lies below the guidance.

Fuel price per metric ton, net of hedges, is projected at $484 and $480 for the fourth quarter and 2018, respectively.

Zacks Rank & Key Picks

Norwegian Cruise Line has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are C.H. Robinson Worldwide, Inc. CHRW, CSX Corporation CSX and Spirit Airlines, Inc. SAVE. While C.H. Robinson carries a Zacks Rank #2 (Buy), CSX and Spirit Airlines sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of C.H. Robinson, CSX and Spirit Airlines have rallied more than 12%, 43% and 52%, respectively, in a year.

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