© Reuters.
Norwegian Cruise Line (NYSE:) Holdings Ltd. reported its Q3 2023 results, showcasing a notable improvement in earnings per share (EPS) but a slight miss on revenue expectations. The company’s performance was boosted by high demand from upmarket consumers and margin enhancement initiatives, along with strong forward bookings and robust pricing. Despite these positive indicators, the company’s shares fell by 0.74% following the announcement.
The cruise line’s adjusted EPS for Q3 2023 was 76 cents, a significant turnaround from the prior-year quarter’s adjusted loss of 64 cents. However, revenues stood at $2,536 million, falling slightly short of the consensus estimate of $2,543 million. This figure still represents an increase from last year’s Q3 revenue of $1,615.5 million.
Revenues were bolstered by passenger ticket sales amounting to $1,733.6 million and onboard revenues which rose to $802.4 million, up from $509.6 million in the same quarter of the previous year. Operating expenses also increased by 19.7%, driven by the resumption of cruise voyages and inflationary pressures.
Despite facing challenges due to global events such as the Maui wildfires and Israel conflict, Norwegian Cruise Line has seen a recent improvement in demand with advance ticket sales showing strength. As of September 30, 2023, cash and cash equivalents stood at $681.6 million while long-term debt was pegged at $12.6 billion.
Fuel price per metric ton fell to $727 from $830 in 2022 while net interest expenses for the quarter were reported at $181.2 million, up from $152.3 million in the year-ago quarter. Gross cruise costs slightly decreased by 0.3% to $1,808.1 million.
Looking ahead to Q4 2023, the company forecasts 98% occupancy and approximately 5.9 million Capacity Days. It expects an adjusted EBITDA of nearly $360 million and a projected loss per share of nearly 15 cents. For the full year 2023, the company anticipates around 102.6% occupancy and approximately 22.7 million Capacity Days. Depreciation and amortization is estimated at nearly $810 million with an adjusted EBITDA expected at nearly $1.86 billion.
However, the company has revised its adjusted EPS projection for 2023 to be nearly 73 cents, down from the prior estimate of 80 cents. On a positive note, the company’s advance ticket sales balance, including the long-term portion, came in at $2.97 billion, a 59% increase from 2019 levels.
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