Norwegian Cruise Line Q2 Adj. Profit Tops View, But Revenues Miss

(RTTNews) - Cruise line operator Norwegian Cruise Line (NCLH) reported Monday a profit for the second quarter compared to a loss last year, boosted by double-digit growth in revenues. Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also issued earnings forecast for the third quarter, below Street view, and for the full-year 2014, in line.

"This quarter marks the first full quarter with both Breakaway-class ships in operation. Along with Norwegian Epic, these newer, premium, earnings-rich ships now comprise a little over a third of our capacity and contributed to the doubling of earnings in the quarter," President and CEO Kevin Sheehan said in a statement.

The Miami, Florida-based company reported net income of $111.62 million or $0.54 per share for the second quarter, compared to a loss of $8.84 million or $0.04 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $121.14 million or $0.58 per share, compared to $60.22 million or $0.29 per share in the year-ago quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter increased 18.9 percent to $765.93 million from $644.43 million in the same quarter last year, but missed thirteen Wall Street analysts' consensus estimate of $797.53 million.

Net Revenue increased 23.6 percent to $595.7 million, driven by a 19.6 percent rise in capacity days and a 3.3 percent improvement in net yield amid higher occupancy percentage, higher onboard and other revenue and benefits from initiatives to reduce our cost of sales.

The company noted that capacity days improved due to the addition of Norwegian Getaway and Norwegian Breakaway to the fleet in January 2014 and April 2013, respectively, partially offset by the planned dry-dock of Norwegian Jewel.

Passenger ticket revenue grew to $538.06 million from $457.62 million, as well as onboard and other revenue improved to $227.87 million from $186.81 million in the year-ago quarter.

Net interest expense for the quarter was $31.9 million, compared to $103.7 million last year.

Looking ahead for the third quarter, Norwegian Cruise Line expects adjusted earnings in a range of $1.05 to $1.10 per share, while analysts project earnings of $1.15 per share. The company expects net yield to increase 2.25 to 2.75 percent, on both reported and constant currency basis.

For fiscal 2014, the company projects adjusted earnings in the range of $2.20 to $2.35 per share. Street is currently looking for full-year 2014 earnings of $2.28 per share. Net Yield growth will be about 3.0 to 3.5 percent, on both reported and constant currency basis.

"We are pleased to reiterate full year earnings guidance given the current promotional environment. We are taking advantage of opportunities to strategically invest in initiatives to increase brand awareness and enhance the guest experience to drive long term returns," Sheehan added.

NCLH closed Monday's regular trading session at $32.76, up $0.36 or 1.11% on a volume of 1.41 per share. However, the stock lost $1.23 or 3.75% in after-hours trading.