MW Norwegian Cruise Line sees cracks in cruise demand amid worries about the economy

By Steve Gelsi

Cruise company's stock drops after a downbeat earnings report and outlook, a day after rival Royal Caribbean lifted its view

Norwegian Cruise Line's stock took a dive Wednesday, after the cruise operator warned it expects to fall short of Wall Street analyst estimates for its second quarter as it faces an uncertain economic outlook.

In the first quarter, the company $(NCLH)$ also swung to a net loss and fell short of analyst estimates for adjusted profit.

Investor disappointment in Norwegian's downbeat results and outlook is understandable, as they come just a day after rival Royal Caribbean Group $(RCL)$ reported the opposite, a profit beat and raised outlook.

Norwegian's stock dropped 8.5% in morning trading, enough to make it the S&P 500 index's SPX fourth-worst performer.

After two years of saying in its future-cruise bookings updates that consumer demand was either strong or healthy, Norwegian said Wednesday that it has seen "softening" in its 12-month forward booked position, given that concerns about the economy have increased.

Those worries may have been heightened on Wednesday, after government data showing the U.S. economy shrank in the first quarter for the first time in three years.

For the current quarter to June, Norwegian issued a forecast of 51 cents a share for its adjusted second-quarter profit. That's a penny below the FactSet consensus estimate of 52 cents a share.

For full-year 2025, the company continues to expect to earn about $2.05 a share, but that's below analyst expectations of $2.08 a share.

For the first-quarter to March 31, the company swung to a net loss of $40.3 million, or 9 cents a share, compared with net income of $17.35 million, or 4 cents a share, in the same period of the previous year.

On an adjusted basis, which excludes nonrecurring items, such as debt-extinguishment costs and share-based compensation, first-quarter profit fell to 7 cents a share from 16 cents a share, and missed the analyst estimate of 9 cents a share.

That marked the first time bottom-line results didn't improve on a year-over-year basis since the first-quarter of 2021.

First-quarter revenue fell to 3% to $2.13 billion, below the analyst estimate of $2.15 billion, and the first year-over-year decline since the second quarter of 2021.

For 2025, analysts are also projecting full-year revenue to increase 7.1% to $10.16 billion, a benchmark that may be difficult to achieve, the company said.

"While we recognize there may be potential pressures on the top line, we believe these can be effectively offset by the continued execution of our cost savings initiatives," the company said.

Including Wednesday's moves, the stock has fallen 38% so far in 2025, while the S&P 500 has slipped 6.3% and rival Royal Caribbean shares have lost 7.9%.

Tomi Kilgore contributed.

-Steve Gelsi

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April 30, 2025 11:48 ET (15:48 GMT)

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