Insights

Why Norwegian Cruise Line Holdings Popped 9.9% Today

What happened 
Shares of Norwegian Cruise Line (NYSE: NCLH) jumped by as much as 9.9% in early trading Tuesday after the company reported its first-quarter financial results before the market opened. Shares gave back some of those gains as the session progressed, and were up by 5.3% as of 3:15 p.m. ET. 
So what 
The Q1 results weren’t all that impressive. Revenue of $521.9 million fell well short of the consensus estimate of $655 million, and its adjusted loss of $1.82 per share versus was worse than the expected loss of $1.73 per share. But the market is less interested in Norwegian Cruise Line’s past right now. It’s the future of the cruise industry that investors are focused on. 
Image source: Getty Images.

Management said demand is extremely strong in the U.S., and current bookings are exceeding 2019 levels. The disruption from Russia’s invasion of Ukraine that caused the cancellation of dozens of cruises was a short-term impact, and the business has adjusted for it. Norwegian Cruise Line even expects operating cash flow to be positive in the current quarter, which is an incredible turnaround. 
Now what 
Consumer spending seems to be getting stronger and there’s pent-up demand for cruises. That has given companies like Norwegian Cruise Line some stability, and a long-term recovery for the industry appears to have gotten underway. The company did still report a loss last quarter, so it’s not out of the woods, but for now, the market is liking what it sees from operations. 
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened 

Shares of Norwegian Cruise Line (NYSE: NCLH) jumped by as much as 9.9% in early trading Tuesday after the company reported its first-quarter financial results before the market opened. Shares gave back some of those gains as the session progressed, and were up by 5.3% as of 3:15 p.m. ET. 

So what 

The Q1 results weren’t all that impressive. Revenue of $521.9 million fell well short of the consensus estimate of $655 million, and its adjusted loss of $1.82 per share versus was worse than the expected loss of $1.73 per share. But the market is less interested in Norwegian Cruise Line’s past right now. It’s the future of the cruise industry that investors are focused on. 

Image source: Getty Images.

Management said demand is extremely strong in the U.S., and current bookings are exceeding 2019 levels. The disruption from Russia’s invasion of Ukraine that caused the cancellation of dozens of cruises was a short-term impact, and the business has adjusted for it. Norwegian Cruise Line even expects operating cash flow to be positive in the current quarter, which is an incredible turnaround. 

Now what 

Consumer spending seems to be getting stronger and there’s pent-up demand for cruises. That has given companies like Norwegian Cruise Line some stability, and a long-term recovery for the industry appears to have gotten underway. The company did still report a loss last quarter, so it’s not out of the woods, but for now, the market is liking what it sees from operations. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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