Sabre (SABR) Stock Rises on Q3 Earnings and Revenue Beat
Sabre Corporation SABR shares gained 18.3% in Thursday’s extended trading session after the travel technology company reported better-than-expected third-quarter results.
The company reported an adjusted loss of 6 cents per share, narrower than the Zacks Consensus Estimate of a loss of 7 cents. Also, the figure was narrower than the year-ago quarter’s loss of 25 cents per share.
Sabre reported revenues of $740 million for the third quarter, surpassing the consensus mark of $731.5 million. The top line came in 11.6% higher than $663.4 million in the year-ago period.
Sabre Corporation Price, Consensus and EPS Surprise
Sabre Corporation price-consensus-eps-surprise-chart | Sabre Corporation Quote
This year-over-year surge in the top line reflects a significant improvement in global air, hotel and other travel bookings. Additionally, the company's Travel Solutions division benefited from favorable rates as international and corporate bookings continued to improve.
Quarter in Detail
The Travel Solutions segment’s revenues increased 11% year over year to $672 million, primarily driven by an increase in global air and other travel bookings. Our model estimates for Travel Solutions revenues were pegged at $647.2 million, which indicated 7.2% 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 $524.8 million from $430.8 million in the third 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 $147 million, down 14.9% from the year-ago quarter’s $172.8 million. The decrease in performance was due to reduced revenues attributed to de-migrations, owing to the repercussions of changes in Russian legislation, along with a 1% decline in the number of passengers boarded.
The Hospitality Solutions segment’s revenues totaled $78.6 million compared with the year-ago quarter’s $67.5 million. This upside was mainly fueled by a 7% increase in central reservation system transactions and a 9% increase in per transaction rate. Our model estimates for Hospitality Solutions revenues were pegged at $81.2 million, which indicated 20.3% year-over-year growth.
Sabre reported an adjusted operating income of $83.6 million, significantly improving from the operating income of $0.7 million posted in the year-earlier period. Adjusted EBITDA improved from $34.3 million reported a year ago to $110.2 million. This improvement was driven by an increase in revenues.
Balance Sheet and Cash Flow
Sabre exited the September-end quarter with cash, cash equivalents and restricted cash of $622.6 million compared with the previous quarter’s $803.7 million.
In the third quarter, Sabre generated an operating cash flow of $59.4 million. The company’s free cash flow was $39 million during the reported quarter.
Zacks Rank and Stocks to Consider
Currently, SABR carries a Zacks Rank #3 (Hold). Shares of the company have declined 33% year to date.
Some better-ranked stocks from the broader technology sector are NVIDIA NVDA, NetEase NTES and Dell Technologies DELL, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVDA’s third-quarter fiscal 2024 earnings has been revised by 10 cents northward to $3.34 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 28 cents to $10.74 in the past 60 days.
NVIDIA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 197.5% year to date.
The Zacks Consensus Estimate for NetEase's third-quarter 2024 earnings has been revised upward by 8 cents to $1.65 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 42 cents to $6.96 per share in the past 30 days.
NTES' earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same on one occasion, the average surprise being 24.54%. Shares of NTES have gained 51.1% year to date.
The Zacks Consensus Estimate for DELL's third-quarter 2024 earnings has been revised upward by a penny to $1.47 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 2 cents to $6.33 per share in the past 30 days.
Dell’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 39.52%. Shares of DELL have climbed 70.7% year to date.
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