Norwegian Cruise warns fuel‑cost hit from global tensions unclear; sees muted 2026 profit

By Neil J Kanatt

March 2 (Reuters) – Norwegian Cruise Line Holdings on Monday warned of uncertainties around its fuel costs this year due to escalating geopolitical tensions, and issued a muted 2026 profit forecast amid pressured demand.

Shares of Norwegian and peer Carnival Corp fell about 11% and 10%, respectively, in early trading, mirroring a broader market selloff sparked by escalating conflict between the U.S. and Israel, and Iran. Royal Caribbean was also down around 6%.

Norwegian expects 2026 adjusted profit of $2.38 per share, below analysts’ $2.55 estimate, and sees annual net yield – profit per passenger after certain costs – to be flat from the prior year.

GEOPOLITICAL AND FUEL‑COST VOLATILITY

The company is not currently operating in affected areas of the Middle East and does not anticipate itinerary impacts, but it is monitoring the situation closely, a spokesperson told Reuters. 

Executives said on a post‑earnings call that the long‑term effects of the conflicts on fuel costs remain uncertain.

Fuel prices per metric ton rose to $662 in 2025 from $641 a year earlier, and are expected to reach $670 in 2026. Margins are also being squeezed by drydocks, new ship deliveries, and maintenance.

DENTED BOOKINGS, OPERATIONAL MISSTEPS

Norwegian said it is entering 2026 under a “pressured” backdrop, with “certain execution missteps” contributing to weaker bookings.

New bookings have slowed as inflation-driven uncertainty curbs household spending on big‑ticket trips.

Truist analysts said Norwegian misaligned its expanded Caribbean capacity with key attractions, noting a delay in opening a new waterpark at its private island, Great Stirrup Cay.

“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.

Meanwhile, activist investor Elliott Management, which disclosed a stake of over 10% last month, had pushed for a new business plan and criticized the company’s leadership appointments, including Chidsey’s.

Jefferies analysts said leadership changes and geopolitical unrest in both Mexico and the Middle East could create a “noisy period” for the company.

Fourth‑quarter revenue was $2.24 billion, below expectations of $2.35 billion, while adjusted profit of 28 cents per share beat forecasts of 26 cents.

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