Norwegian Cruise Line Stock Jumps as Passenger Spending Leaves Fuel Costs Astern

Resilient demand for travel was enough to keep fuel costs, which has weighed on the stock, well astern. (Courtesy Norwegian Cruise Line)

Norwegian Cruise Line stock surged on Thursday after the cruise operator delivered financial results and an outlook ahead of Wall Street’s expectations.

Resilient demand for travel was enough to keep fuel costs, which has weighed on the stock, well astern.

Norwegian Cruise Line stock was up 9.5% in premarket trading, poised to open at its highest level since August.

Norwegian reported revenue of $2.9 billion in the third quarter, slightly ahead of expectations of $2.88 billion among analysts surveyed by FactSet. Earnings were stronger, with earnings per share of $1.07 well ahead of estimates of 93 cents.

The standout performance was driven primarily by stronger-than-expected close-in demand, the company said, referring to late bookings, as well as onboard spending by passengers and cost discipline.

Lighter fuel use—consumption of 239,000 metric tons was below the company’s projection—also helped as Norwegian grappled with fuel prices per metric ton, net of hedges, up to $819 from $744 last year.

“As we implement the next phase of our turnaround, we are focused on sharpening Norwegian Cruise Line’s brand positioning, improving marketing effectiveness and taking a more disciplined approach to revenue management as well as a prudent base-loading strategy,” chairman and CEO John W. Chidsey said in a statement. “We are seeing the early signs of progress and expect Net Yield growth of 1% to 2% in 2027, with a meaningful acceleration in the back half of the year.”

Beyond net yield, a measure of pricing performance and the ability to generate revenue, the company’s guidance also looks good. Norwegian said it expects EPS for the full year at $1.70, above estimates of $1.54.

Write to Jack Denton at jack.denton@barrons.com

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