By Despite exceeding second-quarter earnings expectations, Norwegian Cruise Line Holdings stock took a sharp downturn prior to Tuesday’s opening bell. This drop can be attributed to lower-than-expected third-quarter guidance.
The cruise operator even increased its full-year earnings guidance by 5 cents, setting it at 80 cents per share. However, despite this positive news, the stock tumbled 9.8%.
During the second quarter, Norwegian reported adjusted earnings of 30 cents per share and generated $2.2 billion in revenue. These results surpassed analyst estimates, with expectations being 26 cents per share on revenue of $2.17 billion.
Coming into the earnings season, expectations were high for cruise line stocks. Norwegian’s shares have already surged by 80% in 2023, as international travel demand sees significant growth.
Royal Caribbean had set an even higher bar with its exceptional earnings announcement and increased guidance last week.
Unfortunately, the heightened expectations were too much for Norwegian to meet.
The company’s third-quarter guidance, traditionally the strongest period for cruise operators, fell short of expectations. As a result, investors are reacting negatively. Norwegian projects adjusted earnings of 70 cents per share for the third quarter, which is below the estimated 80 cents per share, according to FactSet data.
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