Norwegian Cruise Line’s earnings above estimates

2018-08-30T11:26:06+00:00 August 30th, 2018|Finance|

Norwegian Cruise Line Holdings generated GAAP net income of $226.7 mill or EPS of $1.01, for the second quarter of this year, compared to $198.5 mill or $0.87 in 2Q17.

Adjusted net income was $271.9 mill or Adjusted EPS of $1.21, compared to $232.7 mill or $1.02 in the same period of 2017. Adjusted EPS outperformed guidance by $0.19.
Total revenue increased 13.2% to $1.5 bill. Gross yield increased 4.3%. Net yield increased 4% on a constant currency basis, outperforming guidance by 200 basis points.

NCLH said that it expected to generate record earnings for 2018 and has increased its outlook above the high end of its previous guidance range, with Adjusted EPS now expected to be in the range of $4.7 – $4.8.
This includes an expected $0.1 impact, split evenly between revenue and expense, as a result of the recently announced itinerary optimisation initiatives, which will benefit future periods. Excluding this impact, the midpoint of Adjusted EPS guidance would have increased to around $4.85.

This year’s net yield growth guidance on a constant currency basis increased 75 basis points from prior guidance to about 3.25%, or 125 basis points from the company’s initial full year outlook published in February.
“The continuation of the robust booking environment from our core source markets, combined with the successful execution of demand creation strategies drove higher pricing across all three brands, resulting in second quarter revenue, yield and earnings growth well above expectations,” said Frank Del Rio, NCLH’s president and CEO. “Global consumer cruise demand shows no signs of slowing as evidenced by solid organic growth and the hugely successful introduction of ‘Norwegian Bliss’, whose record-breaking performance surpassed our high expectations.

“The strong demand environment is expected to continue driving higher pricing in the back half of the year, leading to an increase of our full year 2018 Adjusted EPS outlook to a range of $4.7 to $4.8, well above the initial guidance range set at the beginning of the year.

“2018 is well on track for yet another year of record financial performance. Furthermore, robust global demand has accelerated year-over-year gains in occupancy and pricing for full year 2019, which remains well ahead of this year’s record levels across all three brands.

“We have a high level of confidence and strong conviction in our outlook for 2019 and beyond as demonstrated by our recent global redeployment initiatives, the bolstering of our measured growth profile with the confirmation of two additional ’Leonardo Class’ ships for delivery in 2026 and 2027, as well as the opportunistic execution of $200 mill in share repurchases in the quarter, bringing the year-to-date total for share repurchases to over $450 mill,” Del Rio concluded.