Norwegian Cruise Line Holdings forecast annual profit below Wall Street expectations, as demand for its higher‑priced voyages softened amid economic uncertainty and rising geopolitical tensions.
Shares of Norwegian fell about 7% in premarket trading, mirroring a broader market selloff sparked by escalating conflict between the U.S. and Israel, and Iran. Peers Carnival Corp and Royal Caribbean were down around 6% each.
The company said it is not currently operating in affected areas of the Middle East and does not anticipate itinerary impacts, but it is monitoring the situation closely.
“Guests unable to reach their embarkation port due to airline‑canceled flights related to regional disruptions will receive a future cruise credit,” a spokesperson told Reuters.
Norwegian's new bookings have slowed down as inflation and tariff‑related uncertainty weigh on household budgets, prompting some consumers to pull back on big‑ticket trips.
The company said it is entering 2026 against a “pressured” backdrop, with “certain execution missteps” hurting bookings.
“Our priority is to act urgently to address these gaps by improving coordination, reinforcing accountability and strengthening financial discipline across the organization,” newly appointed CEO John Chidsey said.
Activist investor Elliott Management, which disclosed a stake of over 10% last month, had pushed for a new business plan and criticized the company's leadership appointments, including Chidsey’s.
Margins have been pressured by higher fuel prices driven by geopolitical tensions - including in the Middle East - as well as costs tied to drydocks, new ship deliveries and maintenance.
Analysts at Jefferies said leadership changes and geopolitical unrest in both Mexico and the Middle East could create a “noisy period” for the company.
Norwegian now expects adjusted profit of $2.38 per share for 2026, below analysts’ $2.55 estimate, and forecasts annual net yield, its profit per passenger after certain costs, to be flat from the previous year.
Fuel costs per metric ton rose to $662 in 2025 from $641 in the previous year, and are expected to reach $670 in 2026.
Fourth‑quarter revenue was $2.24 billion, missing expectations of $2.35 billion, while adjusted profit of 28 cents per share beat forecasts of 26 cents.
(Reuters)
