Personal Finance

Why Booking Holdings Stock Dropped Today

Person using a laptop to book travel plans online

What happened

Shares of Booking Holdings (NASDAQ: BKNG) have dropped today, down by 6% as of 1:08 p.m. EDT, after the company formerly known as Priceline reported second-quarter earnings. Booking's guidance left a bit to be desired.

So what

Revenue in the second quarter came in at $3.54 billion, which translated into non- GAAP net income of $1 billion, or $20.67 per share. Both top- and bottom-line figures were ahead of consensus estimates, which called for $3.44 billion in sales and an adjusted profit of $17.44 per share. Room nights sold jumped 12% to 190.5 million, rental car days sold increased a mere 1% to 20.9 million, and airline tickets sold grew 5% to 1.9 million.

Person using a laptop to book travel plans online

Image source: Getty Images.

Now what

"Booking Holdings achieved strong results for the second quarter," CEO Glenn Fogel said in a statement. "Adjusted EBITDA and non-GAAP EPS were up year-over-year 35% and 36%, respectively." He added: "We will continue to execute on our long-term strategy to drive profitable growth and invest in capabilities to increase customer loyalty and build a larger direct business."

Guidance was what sent investors packing, even though the company has a history of issuing overly conservative guidance only to top its own lowball forecasts. Booking's outlook calls for revenue to grow 6% to 9% in the third quarter, which is expected to result in non-GAAP net income of $1.76 billion to $1.81 billion, or $36.70 to $37.70 per share. Analysts have been modeling for earnings per share of $39.79.

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Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Booking Holdings. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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