Even so, shares fell more than 8% pre-market open (and closed 12% lower) as the company's forecast for Q3 adjusted EPS of 70 cents is under the 79-cent consensus.
Q2 results
Adjusted net income of $137m, or 30 cents per share, was higher than Wall Street's 27-cent expectation and up from the loss of $478.3, or $1.14 per share, a year ago. US GAAP net income was $86.1m, or 20 cents EPS, up from the $509.3m loss, or $1.22, in Q2 2022.
Revenue was a record $2.2b, slightly higher than the consensus forecast of $2.17b and 33% higher than in 2019.
'We are pleased to report strong second quarter results, in which we met or exceeded guidance on all key metrics, allowing us to improve our full year outlook for adjusted EBITDA and adjusted EPS,' said Harry Sommer, president/CEO, NCLH. 'The continued strength in the demand environment is evident not only in this quarter’s results, in which we generated a meaningful increase in pricing on 19% capacity growth compared to 2019, but also in our forward booked position which is within our optimal range and at higher pricing.'
First quarter where EBITDA exeeded 2019
Adjusted EBITDA was approximately $515m, better than guidance, driven primarily by lower adjusted net cruise costs ($156 in constant currency, lower than Q1 and guidance of $159) and lower fuel expense.
This also marks the first quarter where adjusted EBITDA exceeded the same quarter in 2019, a key milestone in pandemic recovery efforts.
105% occupancy
Occupancy improved sequentially to approximately 105%, in line with guidance and reflecting the completion of the company's phased ramp-up.
Outlook
NCLH said it continues to experience strong and resilient consumer demand. The cumulative booked position for the second half of 2023 is ahead of record 2019 levels at continued higher pricing.
The company remains within its optimal booked position of approximately 60% to 65% on a 12-month forward basis.
Advance ticket sales balance increased versus the prior quarter to a record $3.5b, approximately $167m higher than in Q1 and 56% above Q2 2019.
Full-year EPS guidance goes to 80 cents/share
Full year 2023 adjusted EPS guidance rose 5 cents to approximately 80 cents, reflecting second quarter outperformance and continued strong results. This is 2 cents higher than Wall Street's expectation.
Adjusted EBITDA guidance improved to a range of $1.85b to $1.95b. This updated guidance reflects approximately $30m of headwinds from higher interest and fuel expense for the back half of the year.
Why lower occupancy is projected
Full year 2023 cccupancy is expected to average 103.5%, consistent with prior guidance. As expected, Q2 occupancy (105%) was lower than the 108.4% in Q2 2019, reflecting the company’s shift to longer, more immersive itineraries. This results in lower occupancy but NCLH expects to attract higher quality guests, generate higher net yields, improve guest satisfaction and cultivate stronger loyalty over time.
Consequently, full year occupancy in 2024 and beyond is expected to be approximately 200 basis points lower relative to 2019.
Liquidity
NCLH had $2.4b of liquidity at quarter-end, including a boost from a $500m return of cash collateral from a credit card processor.
This is a 'strong signal from our external partners of their increased confidence in our financial position and future outlook,' EVP/CFO Mark Kempa said.
See also 'NCLH booking window stretches to record 255 days'
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