By Jeremy C. Owens
Booking Holdings Inc. exceeded $2 billion in quarterly sales for the first time since the beginning of the pandemic in a Wednesday earnings report, but losses exceeded expectations as the company waits for a stronger bounceback for travel amid the global pandemic.
Booking (NAS:BKNG) reported second-quarter losses Wednesday of $167 million, or $4.08 a share. After adjusting for changes in equity holdings and costs to pay off some debt, the online-travel company reported losses of $2.55 a share, an improvement from a loss of $10.81 a share a year ago , when the effects of the COVID-19 pandemic shut down travel globally.
Sales increased to $2.16 billion from last year’s $630 million, but still trailed by a wide margin the same quarter in 2019, before the pandemic, when Booking reported revenue of $3.8 billion. Analysts on average expected adjusted losses of $2.06 a share on sales of $1.88 billion, according to FactSet.
The online-travel industry has struggled to regain footing as the pandemic has dragged on, with consumers preferring to travel short distances and stay in alternative lodging to hotels. International and business travelers, big parts of Booking’s business, have especially stayed on the sidelines.
For more: Travelers are booking trips online again, but they mostly want the same thing: Not a hotel
Booking shares dipped slightly in after-hours trading immediately following the release of the results, but closed the extended session 3% higher than their closing price of $2,085.64 after Chief Executive Glenn Fogel said in a conference call that travel in Europe is rebounding and should lead to Booking getting closer to pre-pandemic levels in the months ahead.
“The sharp return to growth initially in the U.S. and then the European markets that we have witnessed this year shows us clearly that travelers are eager to get back to booking trips on our platform when restrictions are lifted and customers are able to travel,” Fogel said. “We expect to be much closer to our 2019 revenue levels in Q3 than we were in Q2, driven by the strong booking improvements we have seen in the last few months.”
While Booking did not provide a specific third-quarter financial forecast, Chief Financial Officer David Goulden said, “We expect our Q3 revenue as a percentage of gross bookings will increase meaningfully from Q2 due the high concentration of check-ins expected in the third quarter and will be about in line with Q3 2019.”
“We are, of course, closely monitoring the impact of the delta variant on the rising COVID case counts around the world as well as some newly imposed travel restrictions, which have led to a modest pullback in our booking trends in the month of July relative to June,” Fogel noted. “However, the July booking trends were improved from our full Q2 results.”
Booking’s stock has declined 6.1% so far this year, as the S&P 500 index (S&P:SPX) has gained 17.8%.