Norwegian Cruise 2025 Q1 Earnings Misses Targets as Net Income Falls 332.2%

Norwegian Cruise (NCLH) reported its fiscal 2025 Q1 earnings on April 30, 2025. The company experienced a decline in revenue and net income, missing analyst expectations. Both passenger ticket revenue and onboard income decreased, contributing to a 2.9% drop in total revenue compared to the previous year. Despite maintaining guidance for the full year, the company faced a net loss, reflecting challenges in market conditions.

Revenue
Norwegian Cruise Line reported a total revenue of $2.13 billion for Q1 2025, marking a 2.9% decline from the previous year's $2.19 billion. Passenger ticket sales generated $1.42 billion, while onboard and other revenues contributed $708.87 million, culminating in the overall revenue figure.

Earnings/Net Income
The company swung to a net loss of $0.09 per share from a profit of $0.04 per share in Q1 2024, with a net loss of $40.30 million. This significant downturn in earnings highlights the company's financial challenges.

Post-Earnings Price Action Review
A review of Norwegian Cruise Line's stock performance following earnings reports indicates a generally positive short-term response. Historically, revenue and net income disclosures have positively influenced the stock price, with win rates over 3 and 10 days at approximately 51% and 53%, respectively. Despite a maximum return of 8.73% observed over 30 days, the stock's current reaction reflects market uncertainty about future earnings. Investors often see these metrics as opportunities, but other factors should also be considered in decisions.

CEO Commentary
“We kicked off 2025 with solid first quarter results, demonstrating the continued momentum of our Charting the Course strategy in building a strong foundation for long-term success and delivering on our vision for guests to Vacation Better | Experience More," said Harry Sommer, President and CEO. He highlighted the introduction of Norwegian Aqua, refurbishments, and new amenities at Great Stirrup Cay, emphasizing a focus on long-term management and disciplined pricing.

Guidance
For the full year 2025, Norwegian Cruise Line maintains its Adjusted EBITDA guidance at approximately $2.72 billion and Adjusted EPS at $2.05. The company expects Net Yield to rise by 2.0% to 3.0%, with Adjusted Net Cruise Cost Excluding Fuel growing between 0% and 1.25%. For Q2 2025, an expected net yield of approximately 2.5% and Adjusted EPS of about $0.51 are anticipated.

Additional News
Norwegian Cruise Line Holdings plans to remove over 5,000 berths from its fleet by 2027. This includes the retirement of four ships: Regent’s Seven Seas Navigator, Oceania’s Insignia, Norwegian Sky, and Norwegian Sun. These ships will be transferred to other cruise lines, reducing the fleet's capacity. However, the company aims to offset this reduction by introducing new vessels across its brands over the next three years, including new ships for Oceania and Regent Seven Seas, and two Prima-class ships for Norwegian Cruise Line. These additions are expected to enhance the fleet's overall capacity by more than 10,000 berths.