Last updated: 03:33 PM ET, Tue April 29 2014

Norwegian Cruise Line CEO: We're ‘On A Roll’

Cruise | Norwegian Cruise Line | Theresa Norton Masek | April 29, 2014

Norwegian Cruise Line CEO: We're ‘On A Roll’

PHOTO: The line's newest ship, Norwegian Getaway, is based in Miami. (Courtesy of Norwegian Cruise Line)

After reporting sharply higher first-quarter profits and revenues, Norwegian Cruise Line is on a roll, according to its optimistic CEO Kevin Sheehan. 

“We’re pretty confident in where we’re going,” Sheehan told financial analysts in a conference call. “We really do feel like the company is on a roll now.”

The April 29 call was made shortly after the company reported adjusted net income of $49.6 million and 23 cents earnings per share for the first quarter, compared to $12.9 million and 6 cents per share in the same period in 2013. On a GAAP basis, net income was $51.3 million and diluted earnings per share were 24 cents.

The positive report is due in part to double-digit premiums the line commands on its two new 4,000-passenger ships, the Norwegian Breakaway, which started sailing last May, and the Norwegian Getaway, which entered service in January. The company absorbed the 23 percent increase in capacity. “These ships are built for profit,” Sheehan said.

The executive noted, as have his competitors, the promotional market this winter in the Caribbean, where capacity increased about 20 percent at a time when a brutal winter dampened all sorts of consumer spending.

“The Wave Season started out not as stellar as we were hoping for as an industry,” he said. The climate improved over the past 10 weeks so “we’re starting to feel a little better about the landscape.”

Europe is looking more positive. For winter 2015-16, the 4,100-passenger Norwegian Epic, which has operated a seasonal Caribbean program, will move to year-round deployment in Europe from Barcelona. “That removes almost a month of low-yielding trans-Atlantics per year,” he said, adding that there is expectation of “nice growth” in Europe in the foreseeable future.

The new 4,200-passenger Norwegian Escape will arrive in Miami in November 2015 to operate the seven-day Eastern Caribbean itineraries after Epic departs. Norwegian Getaway will continue year-round seven-day Western Caribbean itineraries from Miami.

“Our capacity in the Caribbean is almost flat when we move into 2015-16,” he said. “We have the right assets on year-round Eastern and Western Caribbean.”

Sheehan said Norwegian also wants to “grow our global footprint” and will again offer South American cruises on Norwegian Sun in winter 2015-16.

An analyst asked if he was eyeing Asia, where other cruise lines are expanding; most notably Royal Caribbean International plans to move its new 4,180-passenger Quantum of the Seas to Shanghai starting in May 2015.

“Asia is on our radar,” he said. “Over the next year or so you will see some action from us, as we want to be a global player. … It’s a piece of future strategy. Our eyes are wide open on that.”

Sheehan also mentioned plans to expand O’Sheehan’s pub, a popular 24-hour eatery and bar on three new ships, to the rest of the fleet starting in May. Currently, the pub is found on Norwegian Epic, Breakaway and Getaway. O’Sheehan’s serves items like fish-and-chips, chicken pot pie and burgers as well as breakfast. The pub now also has an ice cream bar that serves shakes and sundaes at a la carte prices.

In other, related news, Steiner Leisure announced an eight-year extension of its contract to operate spas on Norwegian ships, including some facilities under the Mandara brand and services in The Haven by Norwegian exclusive suite complex. Steiner operates spas aboard 146 ships operated by Azamara Club Cruises, Carnival Cruise Lines, Crystal Cruises, Cunard Cruise Line, Holland America Line, Ibero Cruises, Norwegian, P&O Cruises, Princess Cruises, Pullmantur Cruises, Royal Caribbean International, Seabourn Cruise Lines, Silversea Cruises and Windstar Cruises.

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