A New Wave of Cruise Stock Success

Riding the High Tide

A rising tide lifts all boats.

Norwegian Cruise Line Holdings made waves early Tuesday by announcing an unexpected profit in the first quarter, thanks to an overwhelming surge in demand. Despite a wider loss than anticipated in the fourth quarter, investors are buoyed by the company's optimistic 2024 forecast.

Market Response

• Norwegian's stock surged by 13% after the opening bell.
• Royal Caribbean saw a 5% increase.
• Carnival climbed by 8%.

While the cruise sector faced rough seas at the start of the year, with Carnival and Norwegian down by 20% each and Royal Caribbean down by 8%, these recent developments indicate a change in the wind.

Setting Sail for Success

After a stellar performance in 2023, doubts lingered about the industry's future growth. However, the recent market correction paired with Norwegian's positive earnings report exemplify that the rally is far from over.

Record Bookings

Norwegian boasts an all-time high booked position, driven by robust consumer demand. Since Black Friday in November, the company has enjoyed unprecedented booking weeks, ending 2023 with advanced ticket sales totaling $3.2 billion—an impressive 56% increase from 2019.

Surpassing Expectations

Norwegian's first-quarter forecast paints a surprising picture:

• Adjusted earnings per share (EPS) of 12 cents, defying expectations of a 20 cents loss.
• Full-year EPS guidance of $1.23, slightly exceeding estimates.

In the fourth quarter, the cruise operator reported an adjusted loss of 18 cents per share on revenue of $1.99 billion, slightly higher than analyst predictions.

Seizing Opportunities

"We are determined to capitalize on our recent achievements and take advantage of the positive momentum and strong demand for cruises," remarked CEO Harry Sommer, highlighting the company's record-high bookings and pricing.

The future of cruise stocks is looking brighter than ever—a testament to resilience and adaptability in a challenging market environment.