-- Norwegian Cruise Line (NCLH) lowered its full-year earnings outlook on Monday amid higher fuel costs and weak consumer demand due to the Middle East conflict, while the cruise operator's first-quarter revenue fell short of market estimates.
The company now expects adjusted earnings to come in between $1.45 and $1.79 per share for 2026, down from its previous projection of $2.38. The current consensus on FactSet is for non-GAAP EPS of $2.10. The stock fell 7.3% in the most recent premarket activity.
Norwegian Cruise said it's seeing headwinds related to disruptions in the Middle East, including high fuel expense and soft demand trends as customers reevaluate their travel plans, especially for Europe. These headwinds have impacted the company's ability to accelerate bookings after it entered 2026 behind its targeted booking pace.
Energy prices have soared as the US-Israel war with Iran curtailed shipments through the crucial Strait of Hormuz. The conflict paused following a recent ceasefire between Washington and Tehran, but a framework for a permanent truce is yet to be reached.
"As we move through the year, we will continue to manage costs and focus on revenue growth to align resources with the high-growth, high value areas of the business," Chief Executive John Chidsey said in a statement.
For the March quarter, the company's revenue inclined 10% to $2.33 billion, but trailed the Street's view for $2.36 billion. Adjusted EPS jumped to $0.23 from $0.10 the year before, topping the average analyst estimate of $0.14.
Passenger ticket revenue grew to $1.54 billion from $1.42 billion in the prior-year quarter, while onboard and other sales increased to $788.9 million from $708.9 million. Occupancy improved to 103.8% from 101.5%, while total cruise operating expenses rose to $1.38 billion from $1.3 billion.
"During the quarter, we acted with urgency to simplify, optimize, and streamline the organization, including executing SG&A savings initiatives totaling $125 million in expected run rate savings," according to Chidsey. "These are long-term structural actions that we believe will help offset near-term pressures and position the business for stronger performance over time."
For the ongoing three-month period, Norwegian Cruise anticipates adjusted EPS of $0.38, while the Street is looking for $0.51.