(Reuters) -Norwegian Cruise Line Holdings raised its full-year profit forecast after beating first-quarter earnings estimates on Wednesday, betting on record demand for cruise vacations to destinations like the Caribbean and higher ticket prices.
However, the company’s shares fell 4.2% in premarket trading after quarterly revenue came in short of analysts’ expectations.
Operators are seeing all-time high booking rates for cruise vacations this year, as travelers continue to opt for sea-based sojourns that offer a range of fun activities under one roof, rather than expensive land-based holidays.
That has given them enough room to hike prices and narrow the pricing gap between cruise and land holidays, which is also helping boost profits.
To cater to the growing demand, Norwegian last month said it had placed an order for eight new ships across its three brands, which are scheduled for delivery between 2026 and 2036.
The cruise operator expects an adjusted profit of $1.32 per share for fiscal 2024, compared with its previous forecast of $1.23 per share.
On an adjusted basis, Norwegian earned 16 cents per share in the quarter, compared with estimates of 11 cents per share, according to LSEG data.
Last week, rival Royal Caribbean Group raised its annual profit forecast for the second time since February, benefiting from soaring demand and higher ticket prices.
Norwegian has continued to grapple with lingering costs of labor, fuel and raw materials, as well as increasing marketing spending as it looks to attract more customers.
Its total cruise operating expenses were up by about 8.4% at $1.39 billion in the first quarter.
Norwegian’s quarterly revenue rose to $2.19 billion, below analysts’ expectations of $2.24 billion.
(Reporting by Granth Vanaik in Bengaluru; Editing by Milla Nissi)
Comments