Norwegian Cruise Line Holdings
stock fell 14% earlier Tuesday despite second-quarter earnings beating expectations. Blame third-quarter guidance.
The cruise operator even hiked its full-year earnings guidance by 5 cents to 80 cents per share. But the stock pointed 9.8% lower.
Norwegian reported adjusted earnings per share (EPS) of 30 cents on revenue of $2.2 billion in the second quarter, beating estimates on both metrics. Analysts were expecting earnings of 26 cents per share on revenue of $2.17 billion.
The bar was high for cruise line stocks coming into earnings season. Norwegian (ticker: NCLH) shares have risen 80% so far in 2023, as of Monday’s close, as international travel demand has boomed.
That bar was raised even higher after
Royal Caribbean
‘s (RCL) blowout earnings and guidance hike last week.
The expectations were too much for Norwegian.
The company’s guidance for the third quarter, typically the best three months for cruise operators, fell short of expectations, and it’s being punished by investors. Norwegian expects adjusted earnings of 70 cents per share in the third quarter, below estimates of 80 cents per share, according to FactSet data.
Truist analysts, led by C. Patrick Scholes, noted that the full-year EPS guidance increase of 5 cents, is “essentially by the amount” of its second-quarter earnings beat, meaning there’s “no organic raise” for the rest of the year in the guidance. They have a Hold rating on the stock.
Given that Royal Caribbean hiked its EPS guidance by 33% last week, Norwegian’s raise must be considered a disappointment.
Write to Callum Keown at [email protected]
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