By Callum Keown

Norwegian Cruise Line Holdings stock tumbled Wednesday after the cruise operator missed earnings expectations in the first quarter and signaled softening demand.

The cruise industry has been steadfast in its view that demand and bookings are remaining strong despite concerns that consumers are pulling back on travel spending. That changed with Norwegian's earnings as it flagged a softening in its 12-month forward bookings.

The company reported adjusted earnings of 7 cents per share on revenue of $2.13 billion. Analysts were expecting EPS of 9 cents on revenue of $2.15 billion, according to FactSet data.

Norwegian maintained its full-year guidance for profit of $2.05 a share but lowered its net yield growth guidance to between 2% and 3%, from a previous forecast of 3%. Net yield effectively measures revenue generated per capacity.

The company said the change reflects recent booking trends and changes in the macroeconomic environment.

"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," CEO Harry Sommer said.

The stock fell 7% to $16.15 ahead of the open of trading Wednesday. That reaction may seem harsh, particularly as maintaining guidance seems to be akin to a hike this earnings season. But investors have appeared skeptical of the cruise sector's resilience in recent months and now have some evidence to match.

Earnings from rival Royal Caribbean on Tuesday probably weren't helping, either. The company convincingly beat expectations and actually hiked its full-year guidance, noting "excellent close-in demand" and a normal level of cancellations.

But Norwegian struck a different tone.

Heading into earnings, the stock has underperformed its peers this year, dropping 32% in 2025 compared to Carnival's 24% decline and Royal Caribbean's 6% fall. With the other two around 2% down Wednesday, Norwegian's underperformance is set to become even more stark.

Write to Callum Keown at callum.keown@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 30, 2025 07:45 ET (11:45 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.