Please ensure Javascript is enabled for purposes of website accessibility

Why Norwegian Cruise Line Stock Dropped Ahead of Earnings

By Rich Smith - Feb 18, 2021 at 1:10PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

News is coming, and it probably won't be good news.

What happened

Shares of Norwegian Cruise Line Holdings (NCLH -12.35%) dropped nearly 5% in early trading on the Nasdaq Thursday and haven't recovered yet (down about 2.6% as of 11:50 a.m. EST) ... and they may not recover for a few more days at least.

Because in just one week, Norwegian Cruise will report the full extent of the financial damage it incurred in 2020.

Paper boat and water with the word "News" written on them

Image source: Getty Images.

So what

Norwegian confirmed just yesterday the precise time and date for its Q4 earnings release: Thursday, Feb. 25 at 7 a.m. EST.  

The company didn't give any hints as to what it will report, but analysts think they know the answer already. According to a tally of estimates assembled by Yahoo! Finance, Q4 will show a loss of $2.17 per share for Norwegian on a staggering 99.8% decline in revenue -- just $2.6 million. And for the year: Norwegian will report $8.46 per share in losses on an 80% decline in sales -- $1.27 billion.  

Now what

Investors are battening down hatches today in preparation for the bad news -- not only at Norwegian but also at peer cruise companies Carnival Corporation (CCL -11.40%) and Royal Caribbean (RCL -10.62%). But the really curious thing is that Royal Caribbean stock is sinking so much less than Norwegian, less than 1%.

Royal Caribbean, after all, is set to report its earnings even sooner than Norwegian will, this coming Monday, and the news there will be almost identically bad to what Norwegian will report: $5.20 per share in losses for the quarter and a 98.6% decline in revenue, along with a $18.28 per share loss for the year on an 80% decline in sales.  

At least Carnival investors don't have to look at their bad news till March 18.  


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Norwegian Cruise Line Holdings Ltd. Stock Quote
Norwegian Cruise Line Holdings Ltd.
$13.23 (-12.35%) $-1.86
Carnival Corporation Stock Quote
Carnival Corporation
$11.62 (-11.40%) $-1.50
Royal Caribbean Cruises Ltd. Stock Quote
Royal Caribbean Cruises Ltd.
$49.50 (-10.62%) $-5.88

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.