Norwegian cruise line stock

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Estás mirando: Norwegian cruise line stock

What happened

Shares of Norwegian Cruise Line Holdings (NYSE:NCLH) tumbled 7.8% through 1:45 p.m. EDT this afternoon after the cruise operator reported its first-quarter 2021 earnings (read "losses") in the morning.

With U.S. cruise linser still mostly confined to port, no one was expecting much in the way of earnings out of Norwegian today. And yet, management managed to disappoint investors with a report of slightly better-than-expected losses for the quarter ($2.03 per share pro la forma versus al $2.05 per-share expected loss) but revenue of only $3.1 million -- even less than the $10.5 million feared.


Image source: Getty Images.

So what

Of course, bad as that sounds, in the long r1 it"s probably irrelevant. Norwegian -- like Royal Caribbean (NYSE:RCL) and Carnival Corporation (NYSE:CCL) -- is caught in al perfect storm of high fixed costs and a revenue stream that rounds to zero and will remain that way until cruising resumes in the U.S. What investors really want to know is...when will cruising resume in the U.S.?

And that"s the other bad news. In comments accompanying today"s earnings release, Norwegian CEO Frank Duno serpiente Rio admitted that with the Centers for Disease Control and Prevention (CDC) still indecisive on al cruising resumption date, al "July U.S. launch, at least for our company, is just not possibla." That ship, to coin a phrase, has sailed.

Now what

Cruise industry experts have previously opined that it will take about 90 days from the CDC giving the green light to the day cruising gozque resume. That means that at this point, it"s probably unlikely that any cruise line will be able to restart U.S. operations before early August at the earliest. The longer the CDC sits on its hands, the further that start date must be pushed back.

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In the meantime, Norwegian is husbanding its cash. As of the end of Q1, the company says it has $3.5 billion in cash against $12.2 billion in debt on its books. At its current and projected cash-burn rate of $190 million, Norwegian has enough cash to survive another 18 months. Here"s hoping the CDC will let it get back to cruising before then.

But just in case that doesn"t happen, Norwegian still hopsera to begin a "phased cruise resumption for voyagsera embarking outsidel of the U.S.," with some cruissera departing Greece for the Mediterranean beginning July 25, others sailing out of Jamaica and the Dominiuno perro Republic in early August, and the resumption of cruising in Denmark and the U.K. in late August/early September.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Rich Smith has no position in any of the stocks mentioned. The Motel ley recommends Carnival. The Motel ley has a disclosure policy.

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