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Factors Likely to Shape Norwegian Cruise (NCLH) Q2 Earnings

Zacks Equity Research

Norwegian Cruise Line Holdings Ltd. NCLH is scheduled to report second-quarter 2019 results on Aug 8. In the last reported quarter, the company delivered a positive earnings surprise of 16.9%. The bottom line also outpaced the consensus mark by 11.2% in each of the trailing four quarters.

Q2 Expectations

The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.26, indicating a 4.1% rise from the year-ago quarter reported figure. Over the past 7 days, the company’s earnings estimates have witnessed downward revisions by 2 cents. For quarterly revenues, the consensus mark is pinned at nearly $1.62 billion, suggesting 6.7% growth from the figure reported in the prior-year quarter.

Let us delve deeper into factors that are likely to influence Norwegian Cruise Line’s second-quarter results.

Factors at Play

Norwegian Cruise Line's results in the second quarter are likely to be driven by robust passenger ticket as well as onboard and other revenues. The Zacks Consensus Estimate for passenger ticket revenues suggests year-over-year growth of 7.7% to $1,160 million. The same for onboard and other revenues is pegged at $472 million, up 6% year over year.

Strong cruise demand and modest capacity growth bode well for Norwegian Cruise. Additionally, higher yield and fleet-expansion efforts are enabling the company to gain traction. Its focus on the lucrative Chinese market is an added positive. Norwegian Cruise Line’s measures to expand its fleet size are also commendable. These apart, Norwegian Cruise Line is making efforts to reward its shareholders through buybacks.

However, high costs, debt burden and Trump’s travel ban to Cuba are likely to hurt the company’s result in the quarter to be reported. Trump administration's policy change on travel to Cuba is likely to negatively impact the company’s earnings by 35-45 cents in 2019.

Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise

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

Norwegian Cruise Line Holdings Ltd. price-eps-surprise | Norwegian Cruise Line Holdings Ltd. Quote

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What Does the Zacks Model Unveil?

Our proven model does not show that Norwegian Cruise Line is likely to beat earnings second-quarter 2019. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Norwegian Cruise Line has an Earnings ESP of 0.00% and a Zacks Rank #4.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the same space that investors may consider as our model shows that these have the right combination of elements to report an earnings beat in the to-be-reported quarter:

Callaway Golf Company ELY has an Earnings ESP of +6.40% and a Zacks Rank #1. The company is scheduled to report quarterly numbers on Aug 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMC Entertainment Holdings, Inc. AMC has an Earnings ESP of +15.29% and a Zacks Rank #3. The company is scheduled to report quarterly numbers on Aug 8.

SeaWorld SEAS has an Earnings ESP of +11.01% and a Zacks Rank #3. The company is scheduled to report quarterly numbers on Aug 6.

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