AI sure does some bad decisions in naval battles, but as said earlier: with equal fleets they are a threat. I often solve this problem by concentrating all fire on their weakest/closest ship, rout/capture/make it surrender and then move on to the next one.
Often my plan involves having a Galley that sails at the biggest enemy ships max firing range, they can't hit it and it effectively nullifies that ship if you sail smartly.