(Reuters) -Norwegian Cruise Line Holdings missed third-quarter revenue expectations on Tuesday on subdued consumer appetite for sea-based vacations as consumers curb spending, sending shares down about 9% in premarket trading.
U.S. customers are steering clear of splurging on expensive cruise vacations amid persistent inflation and tariff-driven uncertainty in the United States following a post-pandemic demand boom for cruise travel.
Fluctuating fuel prices owing to escalating geopolitical tensions, including in the Middle East, also pressure cruise operators, along with expenses related to drydocks, ship deliveries and maintenance.
They are also impacted by the U.S. government shutdown affecting port activity and the travel plans of American consumers, especially as the busy holiday season approaches.
The company’s quarterly revenue rose 4.7% to $2.94 billion, compared with analysts’ expectation of a 7.5% rise to $3.02 billion, according to data compiled by LSEG. It had risen 10.7% in the year-ago quarter.
It said lower air program participation – where the company helps coordinate flights to fit a planned cruise itinerary – affected reported revenue.
Analysts said investments into upgrading the company’s Great Stirrup Cay, one of its two island destinations, would help boost demand.
Fuel price per metric ton, net of hedges, increased to $744 from $699 a year ago.
Norwegian Cruise Line sees current-quarter adjusted profit per share of 27 cents, below the estimate of 30 cents.
It still expects full-year adjusted net income of about $1.05 billion, but lifted its adjusted profit forecast to $2.10 per share, compared to the previous forecast of $2.05 per share.
For the third quarter, it reported a profit of $1.20 per share, excluding items, compared to estimates of $1.16 per share.
Similar to Norwegian Cruise Line, peer Royal Caribbean raised its annual profit forecast last week, but forecast current-quarter profit below estimates as it faces higher costs.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Pooja Desai)
