Cruise line revenue rises, profit falls

Norwegian CEO calls Q1 ‘solid start’

The parent of Miami-based Norwegian Cruise Line posted a smaller year over year profit in the first quarter. But revenue rose from a year ago, buoyed by increased onboard spending and higher ticket prices, the company announced Wednesday.

Norwegian Cruise Line Holdings generated net income of $61.9 million or 27 cents a share in the quarter compared with $73.2 million or 32 cents in the same period in 2016.

Revenue for the period rose 6.8 percent to $1.2 billion.

The boost in revenue was driven primarily by the addition of the Sirena and Seven Seas Explorer ships to the fleets of its other two brands Oceania Cruises and Regent Seven Seas Cruises, respectively.

“2017 is off to a solid start with strong first quarter results which include record revenue of $1.2 billion for the quarter,” said Frank Del Rio, company president and CEO, in a statement. “The operating environment has remained favorable with strong close-in demand for Caribbean sailings and strength in onboard revenue driving topline growth above expectations.”

Looking to the second quarter, the cruise company is expecting adjusted earnings per share of 95 cents, compared to 40 cents in the first-quarter. While for full-year 2017, it’s increased its outlook and is forecasting record earnings with adjusted earnings per share in the range of $3.79 to $3.89.

“A strong end to the most successful Wave [promotional] season in recent history resulted in a meaningful improvement in our full year booked position, with both occupancy and pricing now well ahead of prior year,” said Wendy Beck, executive vice president and chief financial officer.

Beck said the increased fullyear outlook was based on the strong performance seen in its core markets and strength of its booked business for future financial quarters.

However, recent market uncertainties in Asia caused by a South Korea travel restriction could impact demand for its new ship custom-built for the China cruise market, Norwegian Joy, as it readies to enter service. The new 3,883-passenger cruise ship will be christened on June 27 in Shanghai.

Still, Beck said: “Taking all factors into account, we are on track to deliver another year of solid financial performance and double-digit adjusted EPS growth.”

Norwegian shares closed down $1.71 or more than three percent to $55.07 in Nasdaq trading Wednesday.