Norwegian Cruise Line Holdings Ltd. NCLH performed very well in the first quarter of 2018, reporting better-than-expected earnings per share and revenues. The company’s earnings (excluding 15 cents from non-recurring items) of 60 cents per share outpaced the Zacks Consensus Estimate of 54 cents. 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.

Notably, Norwegian Cruise Line’s fellow cruise line operator — Royal Caribbean Cruises Ltd. RCL — had also reported  had also reported better-than-expected first quarter earnings per share last month.

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


Norwegian Cruise Line expects earnings per share (excluding special items) of approximately $1.02 in the second quarter of 2018. The Zacks Consensus Estimate is pegged at $1.03 per share, slightly above the company’s projection.

For 2018, the company anticipates earnings per share (excluding special items) in the band of $4.55-$4.70. The Zacks Consensus Estimate of $4.61 per share lies within the company’s guided range. Fuel price per metric ton, net of hedges, is projected at $470 for the second-quarter and 2018.

Zacks Rank & Stocks to Consider

Norwegian Cruise Line has a Zacks Rank #4 (Sell).

Better-ranked stocks in the broader  Consumer Discretionary sector are Discovery, Inc. DISCA and Michael Kors Holdings Limited KORS carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Discovery and Michael Kors have gained 7.3% and 5.5%, respectively, on a year-to-date basis.

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