DISAPPOINTING QUARTER FOR NORWEGIAN

Posted on 08/12/2016 | About Miami, Florida

Norwegian Cruise Line delivered second-quarter results that fell short of expectations. Shares in the Miami-based cruise operator are down nearly 7 percent in pre-market trading and 27 percent for the year. President and chief executive Frank Del Rio suggested that "successive geopolitical events" were factors in the losses.

North American travellers have backed away from Mediterranean cruises since the terrorist attacks in Paris, Brussels and Turkey. Half of Norwegian’s fleet is deployed to that area.
The weakened British pound that resulted from the Brexit vote has also been a factor
Total revenue for the June quarter rose 9.3 percent to US $1.18 billion, but it was weaker than the $1.21 billion that analysts had forecast.
The cruise line will cut its earning forecast. Full-year adjusted earnings per share are expected to come in at $3.35 to $3.45, compared with its previous guidance of $3.65-$3.85.
Adjusted net yield, or net revenue per "available passenger cruise days" is anticipated to grow only 1 percent this year, down from the 3.5 percent growth it was expecting only three months ago.
Norwegian said it no longer expects to achieve its previously stated target of $5.00 adjusted EPS for 2017.
Norwegian acquired Prestige Cruises International for $3 billion in cash and stock. When the deal was announced in the fourth quarter of 2014, Norwegian planned to finance the deal with existing cash, new and existing debt, and the issuance of about 20.3 million shares.
Shares for Carnival Corp. and Royal Caribbean Cruises Ltd. also dropped this year. The industry blames the terrorist attacks as well as the Zika virus’s spread in Latin America and the Caribbean.