Norwegian Cruise Line’s CEO and President Kevin Sheehan was upbeat on today’s Q2 earnings call, noting the company guidance for earnings per share from $0.80 to $0.85 for Q3, and from $1.30 to $1.40 for the full year.
Last year, Norwegian posted $0.94 for the full year and $0.71 for 2011.
Sheehan said he is confident about 2014, saying the “expectation is for a very handsome growth in net income next year.”
As for the industry incidents that have led to so much negative publicity, and the economic downturn in Europe, Sheehan said they had all been accounted for in the company’s guidance.
He also said that analysts should not only look at a quarter, but consider the company on an annual basis and its direction. Last year, Norwegian had what he called a fantastic Q3, which may make year-over-year comparisons difficult, he suggested.
Also, according to Sheehan, European passengers tend to spend less aboard, while Americans want to see everything once they have travelled that far and will buy more shore excursions and spend no matter what.
For Q2, Norwegian had 28 percent of its capacity in the Mediterranean, 20 percent in Alaska and 20 percent in Bermuda, 13 percent in the Caribbean, 8 percent in the Baltic, 7 percent in Hawaii and the balance in other trades.
While cruise costs were up, Sheehan attributed the increase to drydocks of the Price of America and the Norwegian Pearl, as well as the introduction of the Breakaway.
Also on the cost side, Norwegian is working department by department, ship by ship.
The company maintained its workforce during the 2008 recession and thus has not needed to add shoreside employees so far in its build-up of capacity.
Sheehan pointed out how Norwegian has increased its EBITDA for 20 consecutive quarters along with margin improvements.
He said that the company was solidly on the right path for the future, having reinvigorated the brand, introduced a newbuilding program, improved its relationships with agents and achieved higher passenger satisfaction scores. “Our job now is to stay the course.”