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Sabre (SABR) Tumbles 14% on Wider-Than-Expected Loss in Q1

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Shares of Sabre Corporation (SABR - Free Report) fell more than 14% on Tuesday after the provider of software and technology solutions to travel industry reported a wider-than-expected loss for first-quarter 2021. The company’s adjusted loss per share of 72 cents came in much wider than the Zacks Consensus Estimate of a loss of 51 cents. Quarterly adjusted loss was also way wider than the year-ago quarter’s loss of 29 centsper share.

The company’s revenues plunged to $327 million from the $659 million reported in the first quarter of 2020. Revenues were primarily affected by significant reductions in air, hotel and other travel bookings due to the coronavirus pandemic’s adverse impact on the global travel industry. Moreover, the top-line figure missed the Zacks Consensus Estimate of $431 million.

Revenue Details

Travel Solutions segment’s revenues plunged 52% year over year to $289 million mainly on unprecedented disruptions in travel due to the pandemic.

Sabre Corporation Price, Consensus and EPS Surprise

Sabre Corporation Price, Consensus and EPS Surprise

Sabre Corporation price-consensus-eps-surprise-chart | Sabre Corporation Quote

Distribution (sub-division of Travel Solutions) revenues slumped 62% to $152 million due to lower bookings volume and decline in average booking fee. During the reported quarter, the company’s total bookings plummeted 55% to 38.94 million, chiefly due to a sharp decline of 52% in net air bookings and a fall of 72% in lodging, ground, and sea bookings.

IT Solutions (sub-division of Travel Solutions) revenues came in at $137 million, down 36% from the year-ago quarter, primarily on a 48% plunge in reservation revenues, and 29% in commercial and operations revenues. Number of boarded airline passengers, a key revenue metric for IT Solutions division, tanked 55% on a year-over-year basis.

The Hospitality Solutions segment’s revenues plunged 29%, year on year, to $42 million chiefly on a 16% decline in central reservation system transactions.

The company reported an adjusted operating loss of $167 million, more than double the operating loss of $73 million posted in the year-earlier period.

Balance Sheet and Cash Flow

Sabre ended the first quarter with cash and cash equivalents of $1.28 billion compared with the previous quarter’s $1.50 billion.

During the quarter, the company used $197 million of cash for operational activities and generated negative free cash flow of $204 million.

Zacks Rank & Stocks to Consider

Sabre currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Lam Research Corporation (LRCX - Free Report) , ASML Holding N.V. (ASML - Free Report) and NVIDIA (NVDA - Free Report) . While Lam Research and ASML Holding sport a Zacks Rank #1, NVIDIA carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Lam Research, ASML Holding, and NVIDIA is currently pegged at 32.8%, 29.8% and 15.1%, respectively.

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