BOOKING, the parent company to almost a dozen travel brands including Kayak and Priceline, delivered a disappointing forecast for the third quarter, even as it posted second-quarter results that mostly beat analysts’ expectations.
In the current quarter, Booking expects growth of 3 per cent to 5 per cent in room nights sold, chief financial officer Ewout Steenbergen said on a call with investors on Thursday, blaming “mild moderation” in the European travel market. Wall Street was expecting gains of 6.6 per cent in the third quarter. Gross travel bookings should rise 2 per cent to 4 per cent, falling short of the 6.9 per cent analysts predicted, due to a decline in flight prices, the company added.
Shares of the company fell as much as 7 per cent in extended trading before rebounding slightly. The stock had been up 3.3 per cent this year through Thursday’s close, trailing the S&P 500 Index.
The forecast is likely to reignite concerns over a broader slowdown in consumer spending on travel, even though the company’s second-quarter results were solid.
In the period ended June 30, the number of nights sold to customers through Booking’s platforms grew 7.1 per cent to 287 million, the company said in a statement, surpassing analysts’ expectations. Adjusted earnings per share were US$41.90, compared with analysts’ estimate of US$38.20.
However, gross travel bookings, which include taxes and fees, were US$41.4 billion, missing a projection of US$41.8 billion.
There have been signs leading into the peak vacation season that travel spending has been broadly slowing. Second-quarter web traffic for online travel sites, including Booking and peers Expedia Group and Airbnb, fell 3 per cent year-over-year and further decelerated in July, Jefferies analysts wrote in a July 23 note.
Expedia and Airbnb are both set to report quarterly earnings next week. BLOOMBERG
