Norwegian Cruise's stock falls after outlook cut, as Israel-Hamas conflict leads to cancellations
By Tomi Kilgore
Cruise operator reports record third-quarter revenue, but stock adds to losses suffered amid a three-month losing streak
Shares of Norwegian Cruise Line Holdings Ltd. slumped Wednesday after the cruise operator topped third-quarter profit estimates but cut its full-year outlook as consumers grew cautious about sailings to the Middle East region.
"We are seeing both elevated cancellation activity and lower new bookings for this region, primarily for close-in sailings, as the conflict is ongoing and still front and center in the consumer cycle," Chief Executive Harry Sommer said regarding the escalating Israel-Hamas conflict, according to a FactSet transcript. He was speaking during the post-earnings conference call with analysts.
The stock (NCLH) dropped 0.9% in morning trading but pared earlier losses of as much as 3.3%. The decline to start the month of November comes after the stock plunged 38.4% amid a three-month losing streak. The stock has never fallen for four straight months.
The company reported before the opening bell that it swung to net income of $345.9 million, or 71 cents a share, from a loss of $295.4 million, or 70 cents a share, in the same period a year ago.
Excluding nonrecurring items, adjusted earnings per share of 76 cents beat the FactSet consensus of 68 cents.
Revenue jumped 57% to a record $2.54 billion, topping the FactSet consensus of $2.53 billion, as passenger-ticket revenue climbed 56.8% and onboard and other revenue rose 57.5%.
The company said it continues to experience "healthy consumer demand," with cumulative bookings for the fourth quarter ahead of levels seen in prepandemic 2019.
However, in addition to the higher cancellations related to the Israel-Hamas conflict, the company has also experienced lower-than-expected close-in, or last-minute, demand for certain longer cruises to the Eastern Mediterranean and parts of Asia.
Looking ahead, the company expects an adjusted per-share loss of 15 cents for the fourth quarter, compared with the FactSet consensus for a profit of 2 cents a share.
For 2023, the adjusted EPS guidance was cut to approximately 73 cents from approximately 80 cents.
The stock has tumbled 30.6% over the past three months but has still gained 10.1% year to date, while the S&P 500 SPX has shed 7.9% over the past three months and advanced 9.8% this year.
-Tomi Kilgore
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
11-01-23 1144ET
Copyright (c) 2023 Dow Jones & Company, Inc.-
What’s Happening in the Markets This Week
-
Worst-Performing Stock ETFs of the Quarter
-
Q3 in Review and Q4 2024 Market Outlook
-
Top-Performing Stock ETFs of the Quarter
-
September Jobs Report Forecasts Show Moderate Hiring Gains
-
Port Strike a Headache for Shippers but a Potential Tailwind for Certain US Transport Stocks
-
13 Charts on Q3′s Roller-Coaster Rally for Stocks and Bonds
-
5 Stocks to Buy Instead of Overpriced US Equities
-
3 Dividend Stocks for October 2024
-
Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue
-
Industrials: Many Stocks Overvalued After Q3 Outperformance
-
Basic Materials: Despite Index Rise, We See Multiple Long-Term Opportunities
-
What the Election Could Mean for Big Tech Stocks
-
3 Lessons From Recent Stock Market Drama
-
Consumer Cyclicals: Even Amid Moderating Consumer Spending, We See Discounts
-
Healthcare: Valuations Look Fair Overall, With Select Industries Still Undervalued