What Happened:

Shares of cruise company Norwegian Cruise Line (NYSE:NCLH) fell 13.9% in the morning session after the company reported first-quarter results, with revenue falling below Wall Street's expectations. However, adjusted EBITDA and EPS came in ahead of consensus. That was driven by higher efficiency and leverage on fixed costs. Occupancy during the quarter clocked in at 104.6%, and the company noted it received an "unprecedented level of advance ticket sales". These strong numbers likely contributed to its recent decision to build eight new vessels. Looking ahead, the company raised its full-year earnings guidance, slightly exceeding Wall Street's estimates. Zooming out, we think this was a mixed but weaker quarter for the company.

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What is the market telling us:

Norwegian Cruise Line's shares are very volatile and over the last year have had 27 moves greater than 5%. But moves this big are very rare even for Norwegian Cruise Line and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 2 months ago, when the stock gained 18.7% on the news that the company reported fourth-quarter results and provided an optimistic earnings forecast for the next quarter, which blew past analysts' expectations. Its revenue narrowly outperformed Wall Street's estimates during the quarter. 

On the other hand, its passenger cruise days unfortunately missed, and its EPS fell short of Wall Street's estimates. Overall, this was a mixed quarter for Norwegian Cruise Line, but the outlook is sure to draw some optimism.

Norwegian Cruise Line is down 8.6% since the beginning of the year, and at $16.69 per share it is trading 25.9% below its 52-week high of $22.52 from July 2023. Investors who bought $1,000 worth of Norwegian Cruise Line's shares 5 years ago would now be looking at an investment worth $288.79.

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