Norwegian Cruise Forecasts Q4 Profit Below Expectations

Norwegian Cruise Line Holdings NCLH.N forecast fourth-quarter profit below expectations on cost pressures and subdued appetite for sea-based vacations as travelers curb spending, sending its shares down about 15% on Tuesday.

Persistent inflation, tariff-driven uncertainty, and the fallout of the prolonged U.S. government shutdown on port activity have clouded demand heading into the crucial holiday season.

Volatile fuel prices due to geopolitical tensions, and expenses related to drydocks, ship deliveries and maintenance are also pressuring cruise operators.

Norwegian expects current-quarter adjusted profit per share of 27 cents, below estimates of 30 cents, according to data compiled by LSEG.

"We're strengthening our brand positioning and marketing to reach the broader family market," said CEO Harry Sommer in a post-earnings call.

Analysts blamed the sharp fall in the stock on investor worries over the company's efforts to cater heavily to families, as it would likely hit ticket revenue.

"While pricing for first and second passengers should rise, additional children in a cabin dilute blended pricing," said Morningstar analyst Jamie Katz.

Norwegian's third-quarter revenue rose 4.7% to $2.94 billion, compared with analysts' expectations of $3.02 billion. 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 revenue.

Occupancy fell to 106.4% from 108.1%, while fuel price increased to $744 per metric ton, net of hedges, from $699 a year earlier.

However, the company lifted its annual adjusted profit forecast to $2.10 per share, compared with the prior forecast of $2.05. Adjusted profit per share of $1.20 beat estimates of $1.16 for the third quarter.

Peer Royal Caribbean raised its annual profit forecast last week, but forecast current-quarter profit below estimates on higher costs.

(Reuters - Reporting by Neil J Kanatt in Bengaluru; Editing by Pooja Desai and Sriraj Kalluvila)