Norwegian Cruise Line Boosts Profit Forecast Again Amid Soaring Demand

Norwegian Cruise Line Holdings on Wednesday raised its annual profit forecast for a third time this year, riding on sustained demand for luxury voyages and higher ticket prices.

With people continuing to splurge on experiences and services over discretionary goods, operators have seen record booking rates for affordable cruise vacations, giving them enough opportunity to increase ticket prices.

"We are witnessing robust demand with strong pricing and booking volumes leading to record-breaking advanced ticket sales," CEO Harry Sommer said on a post-earnings call.

The company most recently raised its profit forecast in May. Rivals Carnival and Royal Caribbean Group have in recent weeks also raised their profit forecasts, despite lingering concerns around an impact from elevated costs.

Norwegian said majority of its new bookings are pivoting to 2025 sailings.

It now expects fiscal 2024 adjusted profit of $1.53 per share, up from its previous forecast of $1.42.

Norwegian earned an adjusted profit of 40 cents per share in the second quarter, compared with analysts' estimates of 35 cents, primarily helped by lower food and travel advisor commission costs.

However, the company's shares pared their early gains and were marginally down in volatile trading even as executives said that their core U.S. consumers were doing well.

The company's revenue of $2.37 billion in the reported quarter fell short of LSEG estimates of $2.38 billion.

"Investor expectations for revenues are high following strong results from Royal Caribbean and (Norwegian's) revenue expectations didn't quite meet those high expectations," said Truist Securities analyst Patrick Scholes.

Onboard and other revenues - which includes those from spending on spa, casino, shore excursions and gift shop purchases - rose 6% to $770.4 million, missing expectations of $785.7 million.

Still, CEO Sommer said the company was seeing "zero decrease" in onboard spending and added guests were continuing to enjoy shore excursions and amenities such as specialty restaurants.

(Reuters - Reporting by Granth Vanaik; Editing by Shailesh Kuber)