Norwegian Cruise Line forecasts weak annual profit on subdued demand

Norwegian Cruise Line Holdings forecast annual profit below Wall Street expectations on Monday as demand for the cruise operator's higher-priced voyages was pressured by economic uncertainty.

Shares of the company, as well as peers Carnival Corp and Royal Caribbean, were down about seven per cent each in premarket trading, tracking a slump in the broader market due to the escalating conflict between the US, Israel and Iran.

Norwegian Cruise is facing a slowdown in new bookings as budget-conscious customers avoid splurging on expensive cruise vacations.

The company said it entered 2026 against a pressured backdrop, with "certain execution missteps" hurting bookings. "Our priority is to act urgently to address these gaps by improving coordination, reinforcing accountability, and strengthening financial discipline across the organization," new CEO John Chidsey said.

Earlier this month, activist investor Elliott Management said it has built a more than 10 per cent stake in the cruise operator. The activist investor is pushing for a new business plan that delivers on available revenue opportunities at Norwegian to drive the share price, while criticizing the appointment of the company's management over the last decade, including that of CEO Chidsey last month.

Increased fuel costs amid escalating global tensions, including in the Middle East, and expenses related to drydocks, ship deliveries, and maintenance are also weighing on the cruise operator's margins.

The cruise operator now expects adjusted profit of $2.38 per share for fiscal 2026, compared with analysts' expectation of $2.55 per share, according to data compiled by LSEG.

Norwegian reported fourth-quarter revenue of $2.24 billion, compared with analysts' expectations of $2.35 billion.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo)