We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sabre (SABR) Q3 Earnings Top Estimates, Revenues Up Y/Y
Read MoreHide Full Article
Sabre Corporation (SABR - Free Report) reported third-quarter 2019 adjusted earnings per share of 27 cents, which decreased 30.8% on a year-over-year basis. However, the figure surpassed the Zacks Consensus Estimate of 24 cents.
Revenues came in at $984 million, up 1.4% from the year-ago quarter. The figure, however, missed the consensus estimate of $992 million.
Growth Travel Network and Hospitality Solutions drove the results. However, macroeconomic headwinds and soft hotel industry bookings hurt the top line.
Sabre Corporation Price, Consensus and EPS Surprise
Travel Network revenues increased 1.5% year over year to $711 million. However, softer Global Distribution System environment was an overhang on the top line. Increase of 1% in bookings drove results for this segment. Incentive expense per booking also jumped moderately to low-single digits.
Airline Solutions revenues came in at $208 million, down 0.6% from the year-ago quarter, primarily due to 4.2% decrease in AirVision and AirCentre revenues.
SabreSonic revenues rose 2% due to the impact of insolvency of Jet Airways and volume reductions at a certain carrier due to a 737 MAX incident, and the demigration of Pakistan International Airlines, Philippine Airlines, and Bangkok Airlines. A 5.4% year-over-year decline in passengers boarded was also a headwind to SabreSonic revenues.
Hospitality Solutions revenues jumped 7% year over year to $74.8 million, driven by 14.1% growth in central reservation system transactions.
The third quarter marked the seventh consecutive quarter of strong gains in Sabre’s share in the Global Distribution System market. Global share grew 100 basis points (bps). Moreover, bookings grew 6% in North America.
Additionally, Sabre completed the acquisition of low-cost carrier PSS solutions provider Radixx.
Margin Details
Adjusted gross profit came in at $346.4 million, down 8.3% from the year-ago quarter. However, adjusted gross margin expanded 980 bps to 48.7%. Rise in booking contribution margin for the first time in three years was an upside.
Adjusted operating income decreased 26.2% year over year to $133.1 million. This was primarily due to high technology expenses related to the increase in the expensed portion of total technology spends. This was partially offset by strong revenue growth and a fall in headcount-related expenses. Adjusted operating margin of 13.5% fell 440 bps.
Adjusted operating income for the Travel Network fell 12.9% due to impact of shift in capitalization mix.
Adjusted operating income for Airline Solutions decreased 13.5%.
During the quarter, lodging ground and sea bookings increased 4% year over year. Hotel and car bookings grew high single-digits. Lower-margin rail bookings declined.
Balance Sheet and Cash Flow
Sabre ended the quarter with cash and cash equivalents of $473.4 million compared with $396.85 million in the previous quarter.
Cash provided by operating activities increased to $166.7 million from $152 million sequentially.
Free cash flow was $141.8 million for the third quarter compared with $105.7 in the second quarter.
During the quarter, $77.6 million worth of shares were repurchased. Including dividends, Sabre returned $192.8 million to shareholders.
Guidance
Revenues for full-year 2019 are expected to be in the range of $3.97 billion to $4.01 billion. This indicates 3-5% growth. The Zacks Consensus Estimate stands at $3.99 billion.
Adjusted earnings per share are expected to be between 95 cents and $1.02. The Zacks Consensus Estimate stands at $1.03.
Free cash flow is likely to be approximately $455 million. The company expects to return to profitability recovery in 2021.
A few better-ranked stocks in the broader technology sector are CDW Corporation (CDW - Free Report) , Anixter International and Benefitfocus, Inc. , each flaunting a Zacks Rank #1.
Long-term earnings growth rate for CDW, Anixter and Benefitfocus is currently projected to be 13.1%, 8% and 20%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Sabre (SABR) Q3 Earnings Top Estimates, Revenues Up Y/Y
Sabre Corporation (SABR - Free Report) reported third-quarter 2019 adjusted earnings per share of 27 cents, which decreased 30.8% on a year-over-year basis. However, the figure surpassed the Zacks Consensus Estimate of 24 cents.
Revenues came in at $984 million, up 1.4% from the year-ago quarter. The figure, however, missed the consensus estimate of $992 million.
Growth Travel Network and Hospitality Solutions drove the results. However, macroeconomic headwinds and soft hotel industry bookings hurt the top line.
Sabre Corporation Price, Consensus and EPS Surprise
Sabre Corporation price-consensus-eps-surprise-chart | Sabre Corporation Quote
Revenue Details
Travel Network revenues increased 1.5% year over year to $711 million. However, softer Global Distribution System environment was an overhang on the top line. Increase of 1% in bookings drove results for this segment. Incentive expense per booking also jumped moderately to low-single digits.
Airline Solutions revenues came in at $208 million, down 0.6% from the year-ago quarter, primarily due to 4.2% decrease in AirVision and AirCentre revenues.
SabreSonic revenues rose 2% due to the impact of insolvency of Jet Airways and volume reductions at a certain carrier due to a 737 MAX incident, and the demigration of Pakistan International Airlines, Philippine Airlines, and Bangkok Airlines. A 5.4% year-over-year decline in passengers boarded was also a headwind to SabreSonic revenues.
Hospitality Solutions revenues jumped 7% year over year to $74.8 million, driven by 14.1% growth in central reservation system transactions.
The third quarter marked the seventh consecutive quarter of strong gains in Sabre’s share in the Global Distribution System market. Global share grew 100 basis points (bps). Moreover, bookings grew 6% in North America.
Moreover, Sabre’s SaaS airline solutions gained momentum.
Additionally, Sabre completed the acquisition of low-cost carrier PSS solutions provider Radixx.
Margin Details
Adjusted gross profit came in at $346.4 million, down 8.3% from the year-ago quarter. However, adjusted gross margin expanded 980 bps to 48.7%. Rise in booking contribution margin for the first time in three years was an upside.
Adjusted operating income decreased 26.2% year over year to $133.1 million. This was primarily due to high technology expenses related to the increase in the expensed portion of total technology spends. This was partially offset by strong revenue growth and a fall in headcount-related expenses. Adjusted operating margin of 13.5% fell 440 bps.
Adjusted operating income for the Travel Network fell 12.9% due to impact of shift in capitalization mix.
Adjusted operating income for Airline Solutions decreased 13.5%.
Hospitality Solutions incurred adjusted operating loss.
During the quarter, lodging ground and sea bookings increased 4% year over year. Hotel and car bookings grew high single-digits. Lower-margin rail bookings declined.
Balance Sheet and Cash Flow
Sabre ended the quarter with cash and cash equivalents of $473.4 million compared with $396.85 million in the previous quarter.
Cash provided by operating activities increased to $166.7 million from $152 million sequentially.
Free cash flow was $141.8 million for the third quarter compared with $105.7 in the second quarter.
During the quarter, $77.6 million worth of shares were repurchased. Including dividends, Sabre returned $192.8 million to shareholders.
Guidance
Revenues for full-year 2019 are expected to be in the range of $3.97 billion to $4.01 billion. This indicates 3-5% growth. The Zacks Consensus Estimate stands at $3.99 billion.
Adjusted earnings per share are expected to be between 95 cents and $1.02. The Zacks Consensus Estimate stands at $1.03.
Free cash flow is likely to be approximately $455 million. The company expects to return to profitability recovery in 2021.
Zacks Rank and Key Picks
Sabre currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked stocks in the broader technology sector are CDW Corporation (CDW - Free Report) , Anixter International and Benefitfocus, Inc. , each flaunting a Zacks Rank #1.
Long-term earnings growth rate for CDW, Anixter and Benefitfocus is currently projected to be 13.1%, 8% and 20%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>