A view of the Norwegian Encore cruise ship during its inaugural sailing from PortMiami, which took place from Nov. 21-24, 2019.
Orlando Sentinel | Tribune News Service | Getty Images
Norwegian Cruise Line shares fell greater than 10% on Tuesday after the corporate posted wider losses than expected and offered soft guidance for the yr, despite persistent travel demand.
The cruise company reported fourth quarter losses of $1.04 per share, greater than analysts’ estimates of 85 cents.
Norwegian can also be projecting full-year earnings per share of 70 cents in 2023, well below expectations of $1.04. The guidance comes as the corporate struggles to cut back the prices and debt weighing down the business. Norwegian had $13.6 billion in debt as of Dec. 31.
As Norwegian tries to climb back to profitability, it didn’t offer much confidence for the primary half of 2023.
CEO Frank Del Rio said the corporate’s first 2023 quarter “shall be the very best cost quarter,” but added that the second half shall be higher. Norwegian is projecting losses of 45 cents per share in the primary quarter, 10 cents higher than Wall Street had anticipated.
Norwegian said its costs proceed to rise, exacerbated by inflation, whilst it returns more ships to service. Del Rio didn’t rule out an equity raise to administer debt, but he said it would not be “prudent to issue more equity to de-lever the corporate,” regardless that “there’s loads of work to do.”
Strong demand is giving the corporate hope it could possibly ride out the difficulties.
“We have seen very, very strong record – near record booking levels dating back to November,” said Del Rio. “So we simply don’t see a weakening consumer.”
Norwegian has lagged behind its competitors, although others are still posting losses because the industry battles higher fuel prices and rates of interest.
Royal Caribbean saw its stock jump after posting narrower than expected fourth quarter losses and bookings earlier in February. Morgan Stanley had upgraded the rival company in January, naming it the “superior cruise operator” coming out of the pandemic.
–CNBC’s Seema Mody contributed to this report.