By Mackenzie Tatananni

Shares of Viking Holdings and other cruise stocks tumbled on Tuesday, even after the company posted a strong earnings report. Bookings may have something to do with it.

At first glance, Viking's first-quarter results appear solid. The company's quarterly loss narrowed to 24 cents a share from $1.21 in the same quarter last year, while the consensus call among analysts tracked by FactSet was for a loss of 29 cents. Revenue grew 25% to $897.1 million, while Wall Street expected $841 million.

But concerns about the finer details appeared to be weighing on the stock. Shares were down 5.3% to $44.59 in early afternoon after falling as much as 9.1% earlier in the session, according to Dow Jones Market Data.

Other cruise stocks slipped, too. Norwegian Cruise Line Holdings and Carnival declined 3% and 1.7%, respectively. The S&P 500 was down 0.5%.

Truist Securities analysts said Tuesday that the company didn't provide financial guidance, as is typical of cruise companies. They described management's commentary as "positive though generally vague," saying a close look at the first-quarter numbers raised questions about how fast prices will rise through next year.

Advance bookings per passenger cruise day for 2026 were tracking 4% higher than the 2025 season as of May 11, the analysts said. That is significant because for 2025, that number started 12% higher than for 2024 and decelerated over time.

"The implication is that +4% is already starting at a lower level than last year's +12%, which was three months later in the year," the analysts wrote. The figure was pulled from Viking's earnings report for the second quarter of 2024, its first quarter as a public company.

In a separate note, a Melius Research team pointed out that pricing normally starts high and moves lower. More expensive cabins, offering higher yields to cruise operators, tend to fill up first, followed by lower-yielding cabins.

In other words, it is unclear whether the company will be able to sustain pricing growth as the year progresses, given that increases in advance bookings are likely to come down, as they did last year.

Concern about the economy remains a problem for the travel industry. But while cruises are a discretionary expense and should therefore be at risk, the industry has proven to be more resilient than other types of travel.

Some carriers have withdrawn their full-year financial guidance, but Carnival and Royal Caribbean have said they would boost capacity to meet growing demand.

Norwegian stock fell in April after the company's first-quarter earnings fell short of expectations and management flagged softness in bookings for a year ahead.

Viking CEO Torstein Hagen said in a statement that the company's 7.1% growth in net yield (adjusted gross margin divided by passenger cruise days) and 14.9% increase in capacity during the quarter were "clear indicators of the robust demand for meaningful and enriching travel experiences" among the customers it serves.

Viking caters to wealthy adults aged 55 and up. Cruise guests must be 18 or older.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.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.

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May 20, 2025 13:45 ET (17:45 GMT)

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