Norwegian Cruise lifts annual profit forecast again on resilient demand

By Granth Vanaik

(Reuters) -Norwegian Cruise Line Holdings on Wednesday raised its annual profit forecast for a third time, 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 40 cents per share on an adjusted basis 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 down about 1% in afternoon trade amid a more than 2% increase in oil prices as tensions in the Middle East rose again.

"Higher crude oil prices today are pressuring the sector," Truist Securities analyst Patrick Scholes said.

Meanwhile, Norwegian's quarterly revenue of $2.37 billion in the reported quarter also 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," Scholes said.

Norwegian Cruise's 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.

(Reporting by Granth Vanaik in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)