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Norwegian Cruise Line lowered its full-year profit outlook on Monday, citing rising fuel costs tied to the Middle East conflict and weaker-than-expected demand, particularly for European travel.
For the full year, adjusted earnings guidance was revised to a range of $1.45 to $1.79 per share, a sharp retreat from the $2.38 per share the company had previously targeted. Full-year net yield is now expected to fall somewhere in the range of 2.7% to 4.7%, a reversal from what had been a projected gain of 0.4%. Wall Street had been more optimistic, with FactSet consensus figures pointing to a 0.1% net yield gain and adjusted earnings of $2.10 per share, according to The Wall Street Journal.
Elevated fuel expenses tied to the Middle East conflict and a pullback in consumer travel interest, especially toward European destinations, have weighed on bookings, which the company said are tracking below its target range. The company also acknowledged execution missteps that resulted in shorter Caribbean itineraries. Norwegian has hedged about 51% of its projected 2026 fuel consumption at a blended price of $534 per metric ton, but projects a full-year fuel cost of $782 per metric ton net of hedges.
Norwegian stock fell 7.2% in premarket trading.
First-quarter results came in ahead of expectations despite the weaker outlook. Revenue for the quarter rose 10% to $2.33 billion, compared with $2.13 billion a year earlier. On the bottom line, the company swung to a profit of $104.7 million, or $0.23 per share, from a year-ago loss of $40.3 million, or $0.09 per share. Adjusted EPS of $0.23 cleared the company's own guidance of roughly $0.16, though quarterly revenue of $2.33 billion fell short of the $2.36 billion that analysts had anticipated, per Reuters.
Adjusted EBITDA for the quarter reached $532.9 million, up 18% from $453.1 million in the first quarter of 2025, and above guidance of about $515 million. Occupancy rose to 103.8% from 101.5% a year earlier, and the company carried 861,060 passengers, up from 669,099.
To offset near-term pressures, Norwegian said it has executed cost-saving measures expected to generate about $125 million in annualized run-rate savings. Full-year adjusted net cruise cost excluding fuel is now forecast to be roughly flat versus 2025.
"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," CEO John Chidsey said in a statement. "These are long-term structural actions that we believe will help offset near-term pressures and position the business for stronger performance over time."
The turnaround push comes after activist investor Elliott Investment Management, which became Norwegian's largest shareholder, pushed for change; Chidsey was brought in as CEO in February, Reuters reported. Five new independent directors joined the board in March.
For the second quarter, Norwegian projected adjusted EPS of about $0.38 and adjusted EBITDA of about $632 million, with net yield expected to decline about 3.6% versus 2025.