Booking (BKNG.US) Q2 Performance Surpasses Expectations, Q3 Guidance Disappoints
We have learned from sources that Booking Holdings (BKNG.US), a leading online travel company, announced its second-quarter financial report on Wednesday morning. According to the data, the company's Q2 revenue increased by 16% year-over-year, reaching $68 billion, exceeding market expectations of $65.5 billion; adjusted earnings per share increased by 32%, reaching $55.40, exceeding market expectations of $50.38.
The second-quarter total booking volume increased by 13%, reaching $467 billion, surpassing analyst expectations, while the average daily rate (ADR) growth was 7.7%. Air ticket sales surged 44% year-over-year.
Looking ahead, Booking made a relatively cautious forecast for its third-quarter performance and warned that "more uncertainty" in economic and geopolitical environments may impact travel demand.
The company operating the Kayak, Priceline, and Booking.com brands expects a hotel booking ADR growth rate of around 4.5% in the third quarter. Analysts had previously averaged an expectation of 5.5% for this key indicator.
This disappointing report suggests that tourists may be controlling their spending due to the presence of trade disputes and unstable economic conditions.
In terms of industry guidance, American tourism has given a mixed signal. As market sentiment stabilizes, Delta Air Lines (DAL.US) has resumed its performance guidance, while American Airlines (AAL.US) has provided relatively pessimistic guidance.
Booking has adjusted its full-year booking volume growth rate to "high single-digit" (based on fixed exchange rates), exceeding the midpoint of April's "mid-to-high single-digit" range.
Booking CEO Glenn Fogel stated during the earnings call that the company's strong performance in the second quarter benefited from growth in European and Asian markets. "Especially in Asia, the momentum is good, with a growth rate in the low two digits."
Fogel added that this region will achieve two-digit growth above in the medium term, making it the fastest-growing market for Booking.
Chief Financial Officer Ewout Steenbergen stated during the call that US average room rates are relatively low, combined with shorter stay lengths and booking windows, indicating that consumers "are more cautious about spending under current economic conditions".
Steenbergen noted that while the company is aware of the global economy's heightened uncertainty, travel demand trends have remained "stable" until the third quarter, which has helped boost its full-year performance guidance.
As of the cutoff date, Booking fell 1.87% after hours. The stock has risen 13% so far this year, outperforming the S&P 500 Index's 8.3% gain over the same period.