The Miami-based company’s $0.85 EPS in Q2 beat analyst estimates, although its revenue missed the mark. Looking ahead, Norwegian forecast Q3 earnings of $1.57 to $1.62, which would fall miserably short of Wall Street’s view for $1.79.
The news doesn’t get any better for the full year, either. NCLH slashed its 2016 EPS forecast to a range of $3.35 to $3.45, down from a prior $3.65 $3.85. Analysts are looking for a much higher $3.74 per share for the year.
From the press release:
“Although we experienced significant booking headwinds we delivered earnings consistent with expectations, generating Adjusted EPS growth of 20% for the first half of the year. As we enter the second half of the year, we are revising our earnings expectations primarily as a result of four factors: continued weak demand from our core North American consumer for European sailings at a time when half of our fleet is deployed in the region, including eight of our highest yielding ships; the effect of a weaker British pound post the Brexit vote; an adjustment to earlier pricing expectations for Miami-based Caribbean itineraries, which continue to outperform prior year despite a doubling of capacity in the low season months; and the impact from maintaining pricing discipline to minimize discounting,” said Del Rio. “With this revision to expectations, we are confident we will deliver strong earnings growth for full year 2016 and grow 2017 Adjusted EPS in the range of 15% to 25%.”
On another sour note that investors are clearly focusing on, NCLH scrapped its 2017 outlook entirely. “As a result of its revised expectations, the Company no longer expects to achieve its previously stated target of $5.00 Adjusted EPS in 2017,” it said via statement.
The stock is selling off hard this morning on the news. Norwegian Cruise Line shares fell $3.67 (-8.54%) to $39.29, and are now down more than 32% year-to-date.
Investors can expect a slew of Wall Street analyst downgrades, price target cuts, and earnings estimates revisions in the coming days as well for NCLH, which could help spur even more selling.