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Norwegian cuts forecast on Brexit, Europe woes
Saturday, 10 Aug, 2016
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Norwegian Cruise Line Holdings said it has experienced ‘continued weak demand’ for travel to Europe from the North American market and will miss its profit target for next year.
The parent company of Norwegian Cruise Line, Oceana Cruises and Regent Seven Seas Cruises cut its earnings forecast for this year after income for the second quarter fell year-over-year to $145.2 million from $158.5 million,despite a 9.3% rise in revenues to $1.2 billion.
Revised expectations mean the company no longer expects to achieve its previously stated target of $5 adjusted earnings per share in 2017.
President and chief executive Frank Del Rio said: "It was a challenging booking environment where we remained mindful of our go to market strategy to minimize discounting and maintain our hard-fought pricing gains, resulting in lower occupancy, which in turn lowered onboard revenue and overall net yield growth compared to our expectations earlier in the year."
"As we enter the second half of the year, we are revising our earnings expectations primarily as a result of four factors: continued weak demand from our core North American consumer for European sailings at a time when half of our fleet is deployed in the region, including eight of our highest yielding ships; the effect of a weaker British pound post the Brexit vote; an adjustment to earlier pricing expectations for Miami-based Caribbean itineraries, which continue to outperform prior year despite a doubling of capacity in the low season months; and the impact from maintaining pricing discipline to minimize discounting.
"With this revision to expectations, we are confident we will deliver strong earnings growth for full year 2016 and grow 2017 adjusted EPS in the range of 15% to 25%."
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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