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Takeaway: We continue to like NCLH and think Prestige synergies are likely to contribute to continued estimate beats

Positive commentary regarding 2015 $25m Prestige synergy target which we think is too conservative. Guidance for 4Q yields is above Street expectations. 



  • 25th consecutive quarter of trailing EBITDA (TTM) growth; 23% CAGR
  • Anticipate Prestige closing in mid-November; 4Q call will be first with integrated company
  • Norwegian Escape:  offering 7-day cruises beginning in Nov 2015
  • Have set Ebola protocols across fleet; have seen impact on the margin over past several weeks however, booking have returned back to pre-Ebola levels.
  • FX impacted 3Q by 2 cents; going forward impact will be similar in 4Q
  • Made incremental investments in marketing in 3Q
  • 4Q
    • Drydock earlier than expected 
    • Work underway for scrubber installations; will have a number of staterooms out of service
  • 2015 capacity: 59% in Caribbean, 17% in Europe, 5% Hawaii, 3% Bermuda
  • 2015 Caribbean capacity: slightly down for the year;
  • 1Q 2015: tougher comps (3.8% yield in 1Q 2014, two ship charters that did significantly well (Sochi/Bud Light Hotel)); volume will be consistent with 1Q 2014
  • Investor Day in early February and will provide 2015 commentary
  • In 2016 and afterwards, will report on consolidated basis

Q & A

  • 2015:  significantly more loaded on Getaway, Epic, and Breakaway in 1Q YoY.  Well ahead on every quarter on load in the Caribbean.  1Q pricing is a little bit tough 
  • <1% industry capacity change in Caribbean in 1Q from 53% to 52.2% 
  • 1Q yield: could finish +1% yield (but would be difficult to achieve that given tough comps)
  • Prestige synergy of $25m:  is already in the bag; more opportunities ahead - port contracts, shore excursions, fuel
  • Margin opportunity with Prestige?  if economic picture gets a little better, could be another 500bps improvement
  • 2015 Prestige:  booked solidly; revenues up significantly, feeling some pressure in 1Q, same as Norwegian. 
  • Revenue opportunities with Pride of America and The Haven concept
  • Shift of drydock impact on 4Q? $2-3m benefit 
  • 1Q 2013 charter contribution: a little over a 1% of growth
  • Commissions/transportation/other line run rate:  15.5-16%; renegotiated port contracts, renegotiated credit card costs, more casino initiatives; more targeted incentive programs.
  • MSC aggressive 'free-ship' offer:  great brand in Europe
  • Europe:  pricing doing well in 2014 but because of carnage in 2012/2013; sees good pricing continuing.
  • Asia:  will be more interested in 2016