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Shares fell about 7% in premarket trading after the company’s first-quarter loss expectation was bigger than expected.
Norwegian Cruise and rival cruise operators such as Carnival (NYSE:CCL) Corp are struggling with rising interest rates, a stronger dollar and soaring food as well as fuel prices due to the conflict in Ukraine.
The cruise operator forecast an adjusted profit of 70 cents per share for 2023, compared with estimates of $1.06, according to IBES data from Refinitiv.
The company expects a loss of 45 cents per share for the first quarter, compared with estimates for a loss of 33 cents.
However, affluent passengers unaffected by high inflation have boosted booking volumes and occupancy rates, helping the company beat fourth-quarter revenue estimates.
On-board and other revenue at $507.6 million accounted for about 33% of total revenue as restrictions imposed during the pandemic were lifted and easing of on-board COVID-19 protocols fueled strong spending on casinos and spas.
Norwegian said demand during the all-important period “wave season” has been very strong and booking volumes have accelerated in recent months, echoing rival Royal Caribbean (NYSE:RCL) Group’s comments from early in February.
The “wave season” is the period during January – March where cruise operators offer special deals and discounts for the year to attract customers.
Norwegian, which owns the Oceania Cruises and Regent Seven Seas Cruises brands, expects occupancy to average about 100% for the first quarter and is on track to reach historical levels for the second quarter.
