Norwegian Cruise Line's Yields Up 3.3 Percent in Second Quarter

norwegian getawayNorwegian Cruise Line Holdings Ltd., operator of Norwegian Cruise Line (, reported financial results for the second quarter ended June 30, 2014. Net yields were up 3.3 percent.

The company reported adjusted earnings per share of $.58, on adjusted net income of $121.1 million, compared to $.29 for the same period in 2013. Net revenue in the period increased 23.6 percent to $595.7 million driven by a 19.6% increase in capacity days plus the yield improvement.

Norwegian said yields improved due to higher occupancy percentage, higher onboard and other revenue and benefits from initiatives to reduce the cost of sales.

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“This quarter marks the first full quarter with both Breakaway-class ships in operation,” said Kevin Sheehan, president and chief executive officer, Norwegian Cruise Line. “Along with Norwegian Epic, these newer, premium, earnings-rich ships now comprise a little over a third of our capacity and contributed to the doubling of earnings in the quarter” continued Sheehan.

The cruise company provided guidance for investors about the third quarter and full year 2014. “We are pleased to reiterate full year earnings guidance given the current promotional environment,” said Sheehan.  “We are taking advantage of opportunities to strategically invest in initiatives to increase brand awareness and enhance the guest experience to drive long term returns.”

The company recently announced an order for two Breakaway Plus-class ships with export credit financing in place.  The contract price for the 164,600 gross ton, 4,200-berth vessels is about $2.2 billion with deliveries scheduled for spring 2018 and fall 2019.

This latest order brings the total number of new ships under contract with Meyer Werft to four, with Norwegian Escape scheduled for delivery in October 2015.

In April, the company announced the a three-year, $500 million share repurchase program.  During the second quarter, the company repurchased approximately 2.4 million shares at an average price of $33.02 per share.

In May, the company announced Norwegian NEXT, a two-year, $250 million investment in “new enhancements, experiences and transformations” across the fleet. The program is aimed at elevating the guest experience through ship revitalizations, enhanced dining and other programs. It also has  “green” elements to reduce environmental impact. Exhaust gas scrubbers are being installed on six of the company’s current ships and all four upcoming new ships.