Booking Holdings shares slip on weaker-than-expected Forecast

Booking Holdings Inc. (NASDAQ: BKNG) reported its first quarter financial results and topped analysts’ estimates, but share slipped after it provided weaker-than-expected Q2 forecast. Shares fell by 5.3 percent during midday on Thursday.

For the first quarter, Booking Holdings or formerly known as Priceline reported revenue of $2.9 billion, increasing 21.1 percent year over year and FactSet’s estimates of $2.87 billion. The company reported an EPS of $12.00 a share, increasing from $9.88 a year prior and beating FactSet’s estimates of $10.70 per share.

The company reported gross travel bookings of $25 billion in the quarter, increasing 21 percent year over year.

"We are off to a strong start in 2018 with solid top and bottom line results for the first quarter with our performance marketing optimization efforts driving a second consecutive quarter of operating margin expansion," said Glenn Fogel, Chief Executive Officer of Booking Holdings.

For the second quarter, Booking Holdings forecasts net income in between $795 and $825 million or an EPS of $16.35 to $17.00. The company estimates revenue growth of 11.5 percent to 15.5 percent.

But rooms booked and total gross travel bookings were below Wall Street’s estimates. The company forecasted rooms booked to increase between 7 percent to 11 percent year over year, while travel bookings increase between 10 percent to 14 percent.

The lower than expected estimates is most likely attributable to many travel agency companies changing their marketing strategies. Booking Holdings began to shift its target audience for advertisements from online to more television ads. The company says it could take some time before it does begin to draw in more bookings, but it will draw in profit.

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