© Reuters. The USS Marina Cruise Line Holdings cruise ship arrives in Havana Bay, Cuba on March 9, 2017. REUTERS/Alexander Meneghini
Written by Ananya Mariam Rajesh and Anne Florentyna Gnanaraja Sekar
(Reuters) – Norwegian Cruise Line Holdings Ltd raised its annual profit forecast and beat its estimates for the first quarter on Monday, as bets on rising ticket prices, pent-up demand and strong onboard spending from wealthy customers sent shares of the company surging. 6%.
The easing of COVID-19 protocols on ships after long periods of restrictions has encouraged people, especially those in the high-income group, to go on leisure cruises with increased spending on many facilities on board ships from casinos to spas.
The Norwegian company, which mostly caters to the wealthy, also raised its ticket prices to offset the impact of higher fuel and food costs due to supply chain problems exacerbated by the Russia-Ukraine crisis.
M Science analyst Michael Erstad said he expects the Norwegian company to continue cutting operating costs “wherever possible and where it doesn’t impact the guest experience.”
Rival Carnival (NYSE:: Corp.) reported a smaller-than-expected quarterly loss and beat revenue estimates in March, waving concerns of slowing travel demand amid looming fears of a potential recession in the United States.
Erstad also added wave season, an important period between January and March in which operators offer special deals and discounts for the year, and was strong and saw overall pricing improved during January-March across the 2023 routes.
Mark Kimba, Norwegian Cruises’ chief financial officer, said the increased annual profit forecast is a reflection of better-than-expected first-quarter results, which should be offset by higher fuel prices and a strong dollar for the remainder of the year. Post-earnings call.
The company expects adjusted earnings for 2023 of 75 cents per share, compared to its previous forecast of 70 cents, in what would be its first profit in three years.