Sabre (SABR) Q2 Loss Narrower Than Expected, Revenues Rise Y/Y
Sabre SABR reported a narrower-than-expected loss for the second quarter of 2023. The company’s top line surpassed the Zacks Consensus Estimate and improved year over year.
The company’s adjusted loss was 17 cents per share, which came lower than the Zacks Consensus Estimate of a loss of 23 cents. Also, the figure was narrower than the year-ago quarter’s loss of 25 cents per share.
Sabre reported revenues of $738 million for the second quarter, surpassing the consensus mark of $704.5 million. The top line came in 12% higher than $657.5 million in the year-ago period. This year-over-year surge in the top line reflects a significant improvement in global air, hotel and other bookings.
Sabre Corporation Price, Consensus and EPS Surprise
Sabre Corporation price-consensus-eps-surprise-chart | Sabre Corporation Quote
Quarter in Detail
The Travel Solutions segment’s revenues increased 12% year over year to $670.8 million, primarily on the gradual recovery of global air and other travel bookings, partially offset by the sale of the AirCentre portfolio in February 2022. Our model estimates for Travel Solutions revenues were pegged at $637.1 million, which indicated 6.3% year-over-year growth. The segment’s revenues also benefited from favorable rate impacts as international and corporate bookings improved.
Distribution’s (a sub-division of Travel Solutions) revenues improved to $530.4 million from $431.5 million in the second quarter of 2022. This was chiefly driven by the gradual recovery of bookings and an increase in average booking fees due to a shift in the booking mix.
IT Solutions’ (a sub-division of Travel Solutions) revenues were $140.4 million, down 16.2% from the year-ago quarter’s $167.6 million. This decline was primarily due to lower revenues from a change in Russian law and lower Commercial and Operations revenues owing to the sale of the AirCentre portfolio.
The aforementioned negative factors for IT Solutions’ dismal performance were partially offset by higher reservation revenues from the ongoing recovery in passengers boarded. The number of boarded airline passengers — a key revenue metric for the IT Solutions division — increased 7.6% year over year to 172.3 million.
The Hospitality Solutions segment’s revenues totaled $76.7 million compared with the year-ago quarter’s $66.2 million. This upside was mainly fueled by the increase in central reservation system transactions, which rose 8% to $31.9 million. Our model estimates for Hospitality Solutions revenues were pegged at $66.8 million, which indicated 0.9% year-over-year growth.
Sabre reported an adjusted operating income of $46 million, significantly improving from the operating loss of $9 million posted in the year-earlier period. Adjusted EBITDA improved from $24 million reported a year ago to $73 million. This improvement was driven by an increase in revenues.
Balance Sheet and Cash Flow
Sabre exited the June-end quarter with cash, cash equivalents and restricted cash of $727.2 million compared with the previous quarter’s $838.1 million.
In the second quarter, Sabre used $27 million worth cash for operating activities. The company’s free cash flow was negative $57 million during the quarter reported.
Zacks Rank & Stocks to Consider
Currently, Sabre carries a Zacks Rank #3 (Hold). Shares of SABR have lost 40.6% over the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Salesforce CRM, NVIDIA Corporation NVDA and Meta Platforms META. While NVIDIA sports a Zacks Rank #1 (Strong Buy), Salesforce and Meta carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been steady at 92 cents per share over the past 90 days. For fiscal 2024, earnings estimates have moved up by 13 cents to $7.79 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 134.3% in the past year.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised southward by a penny to $1.60 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 4 cents to $7.44 in the past 60 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 16.3% in the past year.
The Zacks Consensus Estimate for Meta Platforms' third-quarter 2023 earnings has been revised upward by 15.1% to $3.44 per share over the past seven days. For 2023, earnings estimates have moved north by 7.9% to $12.94 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the average surprise being 19%. Shares of the company have surged 86.2% in the past year.
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