Norwegian Cruise Line Holdings (NCLH) posted a strong Q1, ended March 31, 2016, reporting net income of $73.2 million, or $0.32 per share, on revenues of $1.1 billion, up from a net loss of $21.4 million on revenues of $938.2 million last year.

Nevertheless, the results were below analysts’ expectations of $0.38 and the stock dropped nearly $3.00 in morning trading.

Earnings were driven by lower operating costs per passenger day combined with higher ticket prices and increased onboard spending.

Net revenue per passenger day was up significantly at $195.61 for Q1 of this year from $187.82 last year. Total operating expenses per passenger day dropped to $220.84 from $232.96. Gross revenue per passenger day was $251.47 for this year up from $248.98 last year.

Frank Del Rio, chairman and CEO, attributed the results to strong Caribbean demand and pricing offset by weakness in Europe and the drydocking of the Norwegian Pride.

For the second half of the year, Del Rio said pricing was up in the middle to high single digits with overall occupancy slightly down compared to this time last year.

Cruise capacity for the company’s three brands will be up 10 percent in Q2 with the full year operation of the Norwegian Escape and the addition of the Sirena, and the earnings guidance is in the range from $0.80 to $0.85 compared to $0.69 last year.

The new Regent Explorer is expected to enter service in July. A sister ship has been ordered for 2020 delivery.

In other developments, Norwegian Cruise Line has a entered into a 40-day charter of the Norwegian Escape this fall at what Del Rio called premium pricing, and the NCLH is in the process of selling its land operations in Hawaii.

The full year earnings guidance is from $3.55 to $3.85 per year.

Del Rio reiterated that the company is on track to its stated target of $5.00 per share by 2017 and double-digit return on investment in 2016, growing to 14 percent by 2018.

As for Cuba, Del Rio promised a company ship would sail there by year-end.

“We still believe Cuba will garner a yield premium,” he said.