NCL stock down on mixed earnings results.

[ColinIllinois]

So, the strategy led to lower occupancy and lowered onboard revenue. Give the guy a payrise.

 

 

Why not post the whole quote so it's not taken out of context?

 

"While successive geopolitical events dampened North American consumer demand primarily for our Mediterranean itineraries, our management team worked diligently to identify cost saving opportunities to partially mitigate these impacts and generate solid Adjusted EPS growth of 13%," said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings. "It was a challenging booking environment where we remained mindful of our go to market strategy to minimize discounting and maintain our hard-fought pricing gains, resulting in lower occupancy, which in turn lowered onboard revenue and overall Net Yield growth compared to our expectations earlier in the year."

[littlelulu01]

My bad. That was a September 2017 price. $899 for 2016. :o

 

Point is, NCL is not getting a 2x or 3x premium.

 

If you were watching the Jade, they were getting that much more. Availability for the season is limited now and almost over so hard to compare but if you take a look, NCL is getting higher prices. Epic ran pretty steady. Jade went very high, Star and Spirit were mixed but overall prices were never dumped like last year and 2014. For comparison the Celebrity and HAL and RCI and even new builds from Carnival and HAL sailings that included Turkish ports saw some pretty heavy discounts this year and some major dumping with the perks thrown in just to get them sold. NCL didn't have to do that. There's always a chance Ncl did dump but just not to the public?

 

Point is, NCL is getting more this year than last year for Europe and 2x or 3x premium on many sailings compared to many Europe competitor sailings. There's always anomalies but im talking overall. Must have been the Brexit vote last week of the quarter that blew up the quarter earnings?

[Seanote]

Must have been the Brexit vote last week of the quarter that blew up the quarter earnings?

 

Unlikely as those pax were long ago booked and well past final payment. The stock price drop has as much to do with NCL recasting its future outlook as it does with Q2 performance.

[HowardK]

Del Rio must be upset. I heard dark and stormys will now be $18.95 across the board!!!

 

 

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[Seanote]

The most disturbing thing to me is that NCLH has reported profits but they are not returning any dividends to the shareholders. I won't buy a stock that operates that way.

 

IIRC, NCL's creditors have a prohibited covenant about not paying dividends. It's probably goes away if NCL reduces leverage to a prenegotiated level. With new ships on order, that is unlikely to happen in the near future.

[HowardK]

The dividend goes to jack del tips bonus. Forbid he should do even half a percent as the average across the s and p and Dow is around a 2 percent yield

 

 

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[Seanote]

Google shows NCLH down 9.30% and CCL down 2.53% right now. That is quite a difference.

 

Another noticable factor is NCLH trading volume is more than double the average.

 

Not just today's loss, but NCLH's price is down 39% off its 52 week high of $64.27. Although the industry is down as a whole, not many CEO's get to stick around with that amount of stock devaluation.

[mking8288]

Not a surprise at all - NCLH lowered their own guidance & forecast ahead. Interestingly - it also cited the Jewel going to Asia but nothing about the new Joy, maybe it was addressed during the conference call. And, bailing out of a Hawaii land-based operations ??

 

Perhaps, it's time to re-think their business model, marketing strategies and customer services. The Takeaways aren't working - can they raise prices even higher & bump up onboard spending with lower occupancies and not making further cuts ??

 

Another forward-looking question is whether Wall Street will downgrade the stock since it's 91% institutional owned. Seeing large blocks of trading today - selling/dumping isn't unusual with the given outlook. Short sellers are still going to make money off the news. This online article calling Q2 results disastrous - http://etfdailynews.com/2016/08/09/norwegian-cruise-line-shares-tank-10-after-disastrous-q2-report/

Edited August 9, 2016 by mking8288

[TNCruzer56]

The market in general is all over the place, and probably will be till after the election.

Despite dramatically lower fuel costs, Cruise lines and airlines are a bad play right now, IMHO.

[Clancampbell]

I blame the water thing.

 

What water thing? 😱

[Shawnino]

The market in general is all over the place, and probably will be till after the election.

Despite dramatically lower fuel costs, Cruise lines and airlines are a bad play right now, IMHO.

 

If cruise lines can't make profits with oil in the low $40s it doesn't bode well going forward.

 

To NCLH in particular, it's clear from reading this board regularly what the problem is: Norwegian wants to charge Princess prices for Carnival product.

[anniegb]

Google shows NCLH down 9.30% and CCL down 2.53% right now. That is quite a difference.

 

Another noticable factor is NCLH trading volume is more than double the average.

 

Price is now at a 52 week low - less than $38 per share.

[SteveH2508]

What water thing? 😱

 

The recently introduced ban on bringing bottled water and soda on board. It came in in mid-July so it had no effect on the figures under discussion. To some people it was a deal-breaker apparently.

[Jules**]

If cruise lines can't make profits with oil in the low $40s it doesn't bode well going forward.

 

To NCLH in particular, it's clear from reading this board regularly what the problem is: Norwegian wants to charge Princess prices for Carnival product.

 

Exactly.

And even further, Carnival's customer service is a little better.

I always thought Carnival was the bottom-feeding, low-rent line, and then I saw how NCL operates.

[swedish weave]

Stock is still dropping and is now 11.76% down. And look at the volume numbers !!

 

We can't yell for Sheehan to come back since he already has another job.

 

37.91 -5.05 (11.76%)

Aug 9, 4:00 PM EDT - Disclaimer

37.89 -0.02 (0.05%) After hours

Open: 39.55

High: 40.59

Low: 37.66

Volume: 10,992,099

Avg Vol: 2,241,373

Mkt Cap: 8.58B

[KarlChilders]

Price is now at a 52 week low - less than $38 per share.

and I am now a shareholder....buy on the dips. and we will get the shareholder OBC on our December cruise.

[anniegb]

and I am now a shareholder....buy on the dips. and we will get the shareholder OBC on our December cruise.

 

Curious - how much is the shareholder OBC??

[SteveH2508]

and I am now a shareholder....buy on the dips. and we will get the shareholder OBC on our December cruise.

 

Perhaps this is a positive that will shut up those who complain about constant negativity towards NCL?:rolleyes:

[KarlChilders]

Curious - how much is the shareholder OBC??

$100 OBC, for shareholders of 100 shares or more. Not a bad benefit, and available every time you sail. Edited August 9, 2016 by KarlChilders

[anniegb]

$100 OBC, for shareholders of 100 shares or more. Not a bad benefit, and available every time you sail.

 

Is it a flat benefit irrespective of cruise length??

 

Not a huge return if you bought the shares at $50.00 though as the shares don't pay a dividend.

[jessico78]

I blame the water thing.

 

The water thing was a...drop in the bucket.

[mistertoaster]

Del Rio is trying to maintain pricing in an industry that has significant over capacity. The legacy airlines tried this and it did not work until a wave of consolidations and some bankruptcies thinned the herd. Until that happens, Del Rio is swimming up stream. The cumulative effect of his policies to further enhance revenues through various charges may raise some revenue, but it is alienating many long term customers and is branding NCL as the nickel and dime line. Not what you want from a branding perspective.

 

I miss Kevin Sheehan. He had a better balance of serving the customer while also serving shareholders. Del Rio is not long in the president's seat if he cannot admit his mistakes, and strike a better balance of shareholder and customer. As of now, I doubt either side is too pleased with his stewardship.

[SteveH2508]

Del Rio is trying to maintain pricing in an industry that has significant over capacity. The legacy airlines tried this and it did not work until a wave of consolidations and some bankruptcies thinned the herd. Until that happens, Del Rio is swimming up stream. The cumulative effect of his policies to further enhance revenues through various charges may raise some revenue, but it is alienating many long term customers and is branding NCL as the nickel and dime line. Not what you want from a branding perspective.

 

I miss Kevin Sheehan. He had a better balance of serving the customer while also serving shareholders. Del Rio is not long in the president's seat if he cannot admit his mistakes, and strike a better balance of shareholder and customer. As of now, I doubt either side is too pleased with his stewardship.

 

First sentence has nailed it. Supply and Demand is one of the fundamental laws of capitalism. Try to beat it and you come a cropper (unless you have a perfect monopoly - which NCL does not).

 

All that FDR seems to have achieved so far, is to undo the reputational improvements that Sheehan was working on (and to lose a lot of previously loyal customers).

[KarlChilders]

Is it a flat benefit irrespective of cruise length??

 

Not a huge return if you bought the shares at $50.00 though as the shares don't pay a dividend.

 

Actually $50 for 6 nights or less, $100 for 7-14, $250 15+ Nights

 

Since I bought at 38 that's not a problem (at least yet) and I wouldn't have bought if I did not think this was close to the bottom.

Edited August 9, 2016 by KarlChilders
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[anniegb]

Actually $50 for 6 nights or less, $100 for 7-14, $250 15+ Nights

 

Since I bought at 38 that's not a problem (at least yet) and I wouldn't have bought if I did not think this was close to the bottom.

 

Thanks for replying.

 

Well done you - enjoy the OBC and your cruise.

 

Annie

Edited August 9, 2016 by anniegb