Norwegian Cruise Line Holdings (NCLH, Financial) has raised its annual profit forecast for the fourth time, driven by record-breaking revenue and pre-sale ticket performance in the third quarter. The demand for cruise vacations remains strong amid increased consumer spending and slowing inflation, which has bolstered the company's performance.
The company's earnings per share (EPS) for the third quarter were $0.99, exceeding analysts' expectations of $0.94. Revenue grew by 11% year-on-year to a record $2.81 billion. Norwegian Cruise Line now projects adjusted EPS for fiscal year 2024 to be $1.65, surpassing both its previous forecast of $1.53 and analysts' average prediction of $1.56.
The strong results were attributed to improved profit margins and reduced operating costs. Passenger numbers in the third quarter exceeded expectations, further contributing to revenue growth. Additionally, the pre-sale ticket balance reached $3.3 billion in the third quarter, marking a historical quarterly high with a 6% increase year-on-year.
The company anticipates a 9.4% increase in revenue per cruise day for 2024, up from an earlier forecast of 8.2%, reflecting robust demand across its three brands and itineraries in the latter half of the year.
Harry Sommer, President and CEO, highlighted the outstanding performance in the third quarter, with revenue, net income, and adjusted EBITDA achieving record highs. He emphasized the company's focus on cost control and margin improvement as key factors driving this quarter's success.
Consequently, Norwegian Cruise Line has again raised its full-year financial outlook and expects 2024 to be a peak year for revenue, net income, and adjusted EBITDA. The company's adjusted EBITDA guidance has been increased by $75 million from $2.35 billion to approximately $2.425 billion, while adjusted EPS has been upgraded by about 8% from $1.53 to $1.65.
Norwegian Cruise Line's performance aligns with its major competitors, benefiting from the ongoing demand for cruise vacations which exceeded expectations. Rival Royal Caribbean Cruise Line also raised its annual profit forecast for the fourth time this year, benefiting from strong demand. Cruise operators have defied concerns about a broader slowdown in leisure travel, partly due to the relatively lower cost of cruises compared to land-based vacation options.
Investors have taken note, with cruise stocks rising on average by about 33% this year, compared to a 14% increase in the S&P 500 consumer discretionary index. Norwegian Cruise Line's shares were up more than 6% in pre-market trading.
