Despite a competitive Caribbean, Norwegian Cruise Line Holdings reported improved revenues and profits for the first quarter of the year.
Miami-based Norwegian said revenue increased by 26 percent year-over-year for the three-month period that ended March 31. Profits were up to nearly $52 million, compared to a loss of more than $97 million in the beginning of 2013.
Adjusted net income, which excluded a onetime income tax benefit, was $49.6 million, compared to $12.9 million for the first quarter of last year. Adjusted earnings per share of 23 cents beat analyst expectations and came in at the high end of Norwegian’s forecast.
Adjusted net cruise costs excluding fuel were up 3.7 percent, mostly because of costs related to the debut of the Norwegian Getaway earlier this year and drydock maintenance expenses for the Norwegian Spirit.
Net yields, or net revenue per capacity day, increased 3.8 percent. But Norwegian lowered its expectations for full-year yields; instead of increasing about 4 percent, the company expects an increase of 3 to 3.5 percent. That change was due in large part to discounting in the Caribbean, where Norwegian and competitors have struggled to raise prices.
Kevin Sheehan, president and CEO of Norwegian, said the company is “cautiously optimistic” that the Caribbean will show improvement moving forward. He pointed out the recent news that MSC Cruises, which introduced the 3,502-passenger MSC Divina for year-round cruising from Miami last fall, will reposition the ship to Europe in the summer of 2015.
“That was a big part of the situation that happened this year,” he said. “I’m feeling that the market size in the Caribbean is getting back to where it needs to be for 2015.”
Norwegian launched the Getaway, with capacity for almost 4,000 passengers, during the first quarter of this year in Miami. That followed sister ship Norwegian Breakaway, which made its debut last spring in New York. Combined, the two vessels represented a 23 percent increase in capacity.
“It’s quite a task to absorb a 23% capacity increase in a single quarter, but our results show that this mission was successfully accomplished,” Sheehan said.
Norwegian also announced that the company’s board of directors had authorized a three-year, $500 million stock buyback program.
By late Tuesday afternoon, the company’s stock was up nearly 6 percent to $33.54.