Like CCL and RCL, NCLH expressed caution over the Caribbean environment. 2014 guidance was a tad short of what the Street was expecting.
CONF CALL
- 3Q capacity increased by 14.9%
- 3 ships in Alaska for 1st time since 2009
- Hawaii capacity increased slightly; Pride dry dock (24 luxury suites)
- Breakaway: guest satisfaction levels same levels as Epic introduction
- Escape: Fall 2015; Bliss: Spring 2017
- Environment has been more challenging than expected in the beginning of the year
- 16 days of govt shutdown coincided with difficult booking environment; heightened close-in booking environment in 3Q
- 3Q net ticket increased 5% and onboard yields increased 1.5% - helped by Breakaway
- 3Q Weighted average cost of debt: under 4%
- 4Q deployment: 55% Caribbean, 17% Europe, remaining spread between Hawaii, Panama Canal, Bermuda, and Other
- 4Q: dry dock for Norwegian Sky and promotional spending for Getaway
- 2014 adjusted NCC guidance: 1-2%
- Getaway: 7-day year-round to Caribbean (1st time in many years)
- Feeling good about Getaway based on Breakaway results
- Pearl- chartered ship so will reduce # of Caribbean itineraries for summer 2014
- 2014 GUIDANCE : +60% EPS growth $2.20 (below consensus of $2.29) but comfortable with low-mid $2.20 range
Q & A
- 1Q bookings a little behind; all other quarters ahead
- Easter calendar effect (booking momentum into 2Q)
- Mid-single digit price improvement
- Pricing above mid-single digits for 2014 overall
- Want to see Caribbean stronger, particularly in 1Q
- 2014 net yields: low/mid 4s
- 1Q/2Q: healthy pricing environment in Caribbean
- High promotional environment
- Caribbean promotional environment: more competitive
- Last month or so, it has been consistent
- 2014 European deployment about 20%
- Pricing has been positive; mid-single digit growth
- Feeling pretty good
- 2014: 64% hedged in fuel
- New ship premium are 'in the double digits'- Getaway lost some premium lately since they priced very high in the beginning (our pricing survey confirms this)
- Has premium widened? Not really.
- Lots of opportunities to drive firm efficiencies (e.g. Six Sigma); 500bps by 2017; invested capital growth of 14%
- Getaway bookings: consistent with mgmt expectations
- Europe future capacity: biggest in NCLH's history; am comfortable with current capacity
- 3Q Onboard: casino was strong; 4Q onboard is back to normal levels
