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

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more