NCL: Yields Are Up, but for How Long?

NCL Corp. said its yields were up slightly in the first quarter but predicts a weaker last nine months of the year. Robin Farley, UBS Warburg financial analyst, said NCL's statement was not surprising, considering Carnival's admission yesterday that bookings for the remainder of the year are a bit softer than expected, particularly in the Caribbean. Farley said NCL's yield growth forecast is higher than both Carnival and Royal Caribbean's growth; that's due to the NCL America operation in Hawaii, which has higher price points and better yields. But the operating expenses of that NCL America operation are also higher, so profit margins remain lower than foreign-flagged cruise operation. NCL Corp. said booking volumes adjusted for capacity hikes this year are slightly lower than last year, although pricing is higher. The cruise company also said more NCL transfers of older ships to parent Star Cruises would be announced soon.

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