TSX edges higher after index falls the most in seven months
Investing.com -- Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) reported record third-quarter revenue of $2.94 billion on Monday, but shares tumbled over 8% at the open on Tuesday as the figure fell short of analyst expectations of $3.03 billion.
The cruise operator posted adjusted earnings per share of $1.20 for the third quarter, beating analyst estimates of $1.16 and marking a 17% increase from the same period last year. However, the revenue miss overshadowed the earnings beat, despite the 5% YoY revenue growth.
Norwegian’s stock dropped sharply following the results as investors focused on the revenue shortfall. The company attributed part of the revenue dynamic to "lower air program participation, which also reduced air-related costs, mainly due to changes in itinerary mix."
"We delivered another record-breaking quarter, with strong performance across all brands. These results highlight the strength of our business, the broad appeal of our multi-brand portfolio, and the outstanding execution by our teams both shoreside and shipboard," said Harry Sommer, president and chief executive officer of Norwegian Cruise Line Holdings Ltd .
The company reported third-quarter occupancy of 106.4%, exceeding its guidance of approximately 105.5%. Net yield increased 1.6% on an as-reported basis and 1.5% on a constant currency basis, in line with guidance.
Norwegian raised its full-year 2025 adjusted EPS guidance to $2.10 from $2.05 previously, above the analyst consensus of $2.08. The company maintained its full-year adjusted EBITDA guidance of approximately $2.72 billion.
Looking ahead, Norwegian expects fourth quarter adjusted EPS of approximately $0.27 with net yield growth of 3.8-4.3% on an as-reported basis. The company highlighted strong demand for Caribbean sailings and said it remains well-positioned within its optimal range for forward bookings.
During the quarter, Norwegian completed strategic capital market transactions that reduced shares outstanding on a fully diluted basis by approximately 38.1 million, or about 7.5%, while keeping net leverage essentially neutral at 5.4x.
"With investors already nervous post RCL’s print last week, NCLH’s print/guide won’t do anything to change the current negative narrative that is hovering over the cruise industry right now," wrote Stifel analyst Steven Wieczynski in a note following the earnings release.
He added: "On top of that, 4Q25 NCC guidance is above expectations, which will cause concern given this story for the last couple of quarters has been all about cost controls. We believe any blip from a cost perspective will cause investor panic. Putting all of that together, we expect a very volatile trading session for NCLH"