Norwegian Cruise Line Holdings sharply cut its full-year earnings outlook, citing the impact of the Middle East conflict on fuel costs and bookings.

The cruise line, which is domiciled in Bermuda and whose ships are also frequent visitors to the island, estimates full-year earnings per share of $1.45 to $1.79, after adjusting for some items, down from $2.38 previously.

“The company is experiencing headwinds related to disruptions in the Middle East, including higher fuel expense and signs of softer demand as consumers re-evaluate travel plans, particularly to Europe,” NCL said in a statement yesterday.

Norwegian shares were down 8.5 per cent in Nasdaq Stock Exchange trading yesterday. They were down 16 per cent this year through Friday's close, compared with declines of 4.8 per cent for Royal Caribbean and 13 per cent for Carnival over the same period.

The forecast for second-quarter net yields, a key measure of revenue per passenger cruise day, was also below expectations. The company expects net yields at constant currencies to drop about 3.6 per cent from a year earlier, a sharp miss compared with the 2.9 per cent increase analysts expected.

First-quarter total revenue grew 10 per cent to $2.3 billion. Norwegian reported net income of $105 million.

Mark Kempa, executive vice-president and chief financial officer of Norwegian, said: “As we navigate a more uncertain macroeconomic and geopolitical environment, we are acting diligently to offset those pressures through targeted SG&A [selling, general and administrative] savings and broader efficiency initiatives.

“Based on the actions taken during the quarter, we now expect full year adjusted net cruise cost excluding fuel to be approximately flat to last year, which should help support margins as we continue to strengthen execution across the business.”

Last week, rival Royal Caribbean said it expected its fuel costs to be about $1.3 billion higher than its previous full-year forecast of $1.17 billion, based on current shipping fuel costs and its hedging activity.

Norwegian is one of several cruise lines domiciled in Bermuda. Viking and Virgin Voyages also have their corporate base on the island, while shareholders of Carnival approved its move to the island last month.

The appeal for cruise lines, and other maritime businesses, is that Bermuda’s tax legislative framework allows corporations to qualify for an exclusion from corporate tax on international shipping income, provided they can demonstrate that the strategic management and decision-making regarding their vessels take place in Bermuda.