Why Norwegian Cruise Line Stock Dropped Today
Key Points
Norwegian Cruise beat earnings this morning, but investors are selling the stock anyway.
The Iran War is dragging down guidance for the rest of 2026.
- 10 stocks we like better than Norwegian Cruise Line ›
Norwegian Cruise Line Holdings (NYSE: NCLH) tumbled 8.5% through 10:35 a.m. ET after reporting mixed earnings -- and lousy guidance -- this morning.
Heading into the report, Wall Street analysts expected Norwegian to earn $0.15 per share on sales of $2.36 billion. The cruise line stock managed to beat the earnings forecast, earning $0.23, but it hit shoals on sales, coming up just short at $2.33 billion.
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Norwegian Cruise Q1 earnings
Sales may have missed estimates, but Norwegian still grew them 10% year over year. Earnings of positive $0.23 per share completely flipped the script on last year's Q1 loss of $0.09 per share, as Norwegian worked hard to cut about $125 million in annual "long-term structural" costs.
These should be permanent savings that will boost Norwegian's profits in future years -- but future years aren't what investors are worrying about. Rather, they're worried about the Iran War, the Strait of Hormuz, and the prospect of $150 oil in the near future.
And all three are already having an effect on Norwegian's near-term business.
What's next for Norwegian Cruise stock
Citing rising oil prices and higher fuel costs for its ships, Norwegian slashed its 2026 earnings forecast. Non-GAAP earnings per share will probably range from $1.45 to $1.79, versus the $2.12 per share that Wall Street was hoping for. Worse, according to Norwegian, every 1% rise in the cost of fuel for its ships as the Iran war-slash-embargo-blockade drags on could cost the company an additional $0.09 per share in lost profit.
Granted, if the Iran conflict ends early and oil prices fall, every 1% change in fuel prices will add $0.09. But it's the downside risk investors are focused on today.
I cannot say I blame them.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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