Norwegian Cruise's stock drops after earnings beat expectations, but current-quarter outlook disappoints

Shares of Norwegian Cruise Line Holdings Ltd. (NCLH) dropped 8.4% in premarket trading Tuesday, after the cruise operator beat second-quarter earnings expectations but provided a downbeat current-quarter outlook. The company swung to income for the quarter to June 30 of $86.1 million, or 20 cents a share, from a loss of $509.3 million, or $1.22 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 30 cents beat the FactSet consensus of 26 cents. Revenue grew 85.8% to $2.21 billion, above the FactSet consensus of $2.17 billion, with passenger ticket revenue rising 86.2% to $1.48 billion and onboard and other revenue increasing 84.9% to $727.0 million. Occupancy reached 105%, in line with what the company expected but still "slightly lower" than the same period of pre-pandemic 2019. "The company continues to experience strong and resilient consumer demand," Norwegian said, as the cumulative booked position is ahead of 2019 levels at higher pricing. Looking ahead, the company said it expects third-quarter adjusted EPS of approximately 70 cents, which was below the current FactSet of 80 cents, but lifted its 2023 EPS outlook to about 80 cents from about 75 cents. The stock has soared 80.3% year to date through Monday, while the S&P 500 has gained 19.5%.

-Tomi Kilgore

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08-01-23 0750ET

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