Booking Holdings Inc. (BKNG - Free Report) delivered first-quarter 2018 non-GAAP earnings of $11.17 per share missing the Zacks Consensus Estimate by 9 cents. Further, the figure declined 6.9% from the year-ago quarter and 50.3% on a sequential basis.
Revenues of $2.837 billion lagged the Zacks Consensus Estimate of $2.931 billion. The figure also decreased 3% year over year and 11.7% from the previous quarter.
This decline in the reported results can primarily be attributed to change in Easter timing and adverse effects of foreign exchange fluctuations. Moreover, declining Agency revenues negatively impacted the top line.
Additionally, the company witnessed weak performance of rental car days and its airline tickets unit remained flat year over year.
Notably, shares of Booking Holdings have lost 16.3% over a year compared with the industry’s decline of 2.5%.
However, the stock has surged 3.76% in the after-hours trade on May 9. This can be attributed to strong second-quarter 2019 outlook driven by robust growth initiatives and strategic investments.
The company witnessed strong growth in room nights booked number during the reported quarter, thanks to its robust properties portfolio. Moreover, its continued focus toward enhancing offerings of places to stay to customers is expected to continue aiding growth in the near term as well as the long haul.
Moreover, the company’s branding initiatives, strengthening direct channel and growing usage of mobile by the travelers for their travel planning remain tailwinds.
Top-Line in Detail
Booking Holdings generates bulk of revenues from the international markets, wherein the agency model is more popular. This is reflected in the merchant/agency split of revenues, which was 21.3/68.7% in the first quarter (previous quarter’s split was 21.8/70.3%).
Merchant revenues came in $603 million, up 14.6% year over year. The company is still focused on ramping up of merchant business.
Further, Agency revenues were $1.95 billion, down 7.8% on a year-over-year basis.
Advertising & Other revenues were $285 million (10% of total revenues), declining 1.4% from the year-ago quarter. These are basically non-inter company revenues from Kayak and OpenTable.
During the first quarter, the total room nights booked was 217 million, exhibiting year-over-year growth of 10.1%. This can be attributed to strong performance of the company’s direct channel, rising mobile share and growing alternative accommodation business.
Booking Holdings’ overall bookings came in $25.4 billion were up 2% (8% in constant currency) from the year-ago quarter. This year-over-year growth based on constant currency was higher than management’s guided range.
Merchant bookings were $5.7 billion, up 29.3% from the prior-year quarter. However, agency bookings decreased 4.4% from the year-ago level to $19.7 billion.