Norwegian Cruise Line Holdings shares jumped more than 4 percent Thursday after the company outpaced earnings estimates and raised its outlook for the year, citing strong demand for cruises and the recent success of its newest ship, the Norwegian Bliss.
"Global consumer cruise demand shows no signs of slowing as evidenced by solid organic growth and the hugely successful introduction of Norwegian Bliss, whose record-breaking performance surpassed our high expectations," said CEO Frank Del Rio, in a press release.
In the second quarter, the company said its net income rose to $226.7 million, or $1.01 per share, from $198.5 million, or 87 cents a share, a year ago. After adjusting for one-time items, the cruise line earned $1.21 per share, which was 19 cents better than analysts were expecting.
Revenue rose 13.2 percent to $1.5 billion, which also was higher than expected.
In the wake of the strong second-quarter earnings report, the company raised its full-year adjusted earnings per share forecast to a range of $4.70 to $4.80. Previously, it estimated earnings of $4.55 to $4.70 per share this year, on adjusted basis.
The Bliss is the latest ship to join Norwegian's fleet of 26 vessels. It may not be the biggest ship in the company's fleet, but it is one of the more impressive ones, with amenities that include a race track to keep guests busy while cruising to their next destination. The Bliss cost about $1 billion to build and is setting its sights to dethrone rivals Carnival and Royal Caribbean.
"The cruise industry is growing like a weed and every ship is full to the hilt. Every cruise line company is reporting record profits," said Del Rio back in May 2018.
According to Cruise Line International Association, more than 25 million people boarded cruise liners in 2017. That number is expected to hit more than 27 million in 2018.
To accommodate the influx of new and returning customers, cruise lines aren't just building bigger ships; they're building more of them. There are more than 80 new ships that are currently in development. Twenty-seven of those ships are expected to hit the seas this year. In July, Norwegian Cruise Line holdings confirmed that the orders for eight new ships including a new class of ships, the Leonardo Class. Norwegian also has a new ship that will be delivered in 2019 called the Norwegian Encore.
Carnival, Royal Caribbean and Norwegian together control close to 80 percent of the cruise market.