Shares of cruise operators took a hit in morning trading following the release of Norwegian Cruise Line’s third-quarter profit outlook, which fell short of Wall Street analysts’ expectations.
Stock Downturn
Norwegian’s stock plummeted by almost 16% to $18.62, while Carnival and Royal Caribbean also experienced significant declines at over 6% and almost 3%, respectively.
Cost-Cutting Measures
Despite the disappointing profit outlook, Norwegian remains committed to cost reduction. Chief Financial Officer Mark Kempa revealed during a conference call that the company has enlisted the help of a consultant to facilitate this process.
Lower Than Expected Profit
Norwegian set a target of 70 cents per share for its adjusted profit in the third quarter. However, analysts were anticipating a higher figure of 80 cents per share, according to FactSet data.
Second Quarter Performance
In the second quarter, Norwegian exceeded market expectations with sales totaling $2.21 billion, surpassing estimates of $2.17 billion. Additionally, adjusted earnings per share reached 30 cents, beating Wall Street’s forecast of 26 cents per share.
Positive Outlook on Demand
Despite the setback, Norwegian executives expressed optimism about the future. They confirmed that demand for cruises remains robust and indicated strong bookings for 2024.
“We continue to witness unwavering consumer interest,” shared Chief Financial Officer Mark Kempa. “We anticipate this trend to persist.”