Why Norwegian Cruise Line was on the rise this week

stock norwegian cruise lines (NCLH 3.69%) Travel and tourism companies recorded higher cruising numbers this week after reporting better-than-expected results in their fourth-quarter earnings reports, showing demand for cruises remains strong.

Norway narrowly beat revenue estimates and gave better-than-expected guidance for 2024, showing the recovery is expected to continue. The stock was up 20% for the week as of Thursday’s close, according to data from S&P Global Market Intelligence.

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Norway’s recovery continues

The world’s third-largest cruise line operator’s boost this week came on Tuesday after it reported impressive fourth-quarter results.

Revenue for the quarter rose 31% to $1.99 billion, beating expectations of $1.97 billion.

The company said it continues to see “exceptional demand” for its Norwegian Cruise Line brands, and that bookings and prices for all four quarters of 2024 are at higher levels than 2023, as it enters the new year with its highest bookings ever. price.

Fourth quarter performance was also solid. Passenger cruise daily revenue increased 21% from 2019 and overall revenue increased 34% from 2019. Yield, a pricing term in the industry, increased 8.2% from 2019 levels.

According to the income statement, the company controlled costs with adjusted net cruise costs, excluding fuel per capacity day, of $154, down 21% year-over-year. Bottom line, we narrowed our loss per share from $1.04 to $0.18 in a seasonally weak quarter. This was slightly worse than expected, with a loss of $0.14 per share.

CEO Harry Sommer said: “Norwegian Cruise Line Holding experienced a significant year of growth and achievement in 2023. We successfully delivered three new ships, one for each brand, the first in the company’s 57-year history. “This represents the most deliveries in a single year in history.”

With these new ships, the company now has 31 ships across its three brands: Norwegian, Oceania and Regent Seven Seas Cruises.

What’s next for Norway

Norway’s guidance looking out to 2024 was also promising. That’s because the company expects net margins to grow 5.5% and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to increase to $2.2 billion from $1.9 billion in 2023. Also predicted: Adjusted earnings per share were $1.23, a significant improvement over 2023’s $0.70 and in line with analyst estimates. However, first-quarter adjusted EPS guidance of $0.12 was significantly better than the $0.20 loss per share estimate, showing that full-year guidance may be conservative.

Looking at Norwegian’s results, it is clear that the company continues to benefit from the recovery in the cruise industry. As business recovers and Norway’s debt leverage improves, the stock price will continue to rise.