Norwegian earnings take a dip in third quarter

The Norwegian Pearl.
The Norwegian Pearl. Photo Credit: Peter Spartin

Norwegian Cruise Line Holdings said third quarter net income dipped to $450.6 million from $470.4 million a year earlier, as strong demand couldn't overcome costs tied to Hurricane Dorian and the loss of Cuba as a cruise destination.

Those problems, along with mechanical issues with the Norwegian Pearl, collectively knocked $75 million off earnings in the third quarter, the industry's biggest of the year.

Nevertheless, CEO Frank Del Rio pronounced demand for the company's core Caribbean cruises "strong" in a conference call with analysts. "We have not seen, and quite frankly do not expect to see, any deterioration in the overall demand dynamics for the greater Caribbean.

"If anything, we have seen a greater acceleration of overall demand over the last four to six weeks, including the demand for Caribbean sailings," Del Rio said.

For the full year, NCLH is projecting net income of $1.08 billion, down from $1.1 billion a year ago and down from $1.2 billion it would expect to earn absent Dorian, issues with the Pearl and the loss of Cuba business.

Revenue for the third quarter hit a record $1.9 billion, up 3% despite a 1.8% decline in capacity days during the quarter.

For 2020, bookings are up in all four quarters, and the NCLH premium brands, Regent Seven Seas Cruises and Oceania Cruises, are more than 70% sold for the year, Del Rio said. But because the first five months of 2019 included cruises to Cuba and the first five months of 2020 won't, it will be hard to equal this year's first-half numbers, notwithstanding the addition of the Norwegian Encore and the Regent Seven Seas Splendor, he said.

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