Norwegian Cruise Line $NCLH 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.