Why Norwegian Cruise Line Stock Is Sinking
Key Points
High fuel costs and reduced travel demand are weighing on Norwegian's results.
The company's turnaround plans need more time to take hold.
- 10 stocks we like better than Norwegian Cruise Line ›
Shares of Norwegian Cruise Line Holdings (NYSE: NCLH) fell on Thursday after the fleet manager slashed its full-year earnings guidance.
Image source: Getty Images.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Norwegian is battling rough seas
Norwegian's revenue rose 4.9% year over year to $2.6 billion in the second quarter, mainly due to increased capacity days.
However, the cruise ship operator's net yield -- a key measure of profitability -- declined by 2.6% on a constant-currency basis.
Norwegian said bookings were being pressured by the ongoing conflict in the Middle East, as well as its own operational issues. Higher fuel costs are also weighing on Norwegian's profits.
To counter these challenges, management is implementing a cost-reduction program to achieve projected annual savings of $100 million. New attractions at Norwegian's resorts are also expected to boost travel demand.
All told, Norwegian's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 4.1% to $666 million. Its adjusted earnings per share declined 6.6% to $0.48.
Management needs more time to find calmer water
Investors were more concerned about Norwegian's guidance. The cruise line cut its full-year adjusted earnings target to $1.50 per share, down from a prior forecast of $1.45 to $1.79.
"While we are confident in the strength of our brands and the long-term benefits of the actions underway, we are still in the early stages of our turnaround," CEO John Chidsey said.
Should you buy stock in Norwegian Cruise Line right now?
Before you buy stock in Norwegian Cruise Line, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Norwegian Cruise Line wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!*
Now, it’s worth noting Stock Advisor’s total average return is 889% — a market-crushing outperformance compared to 203% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 30, 2026.
Joe Tenebruso 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.
Recommended Articles
