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Booking Holdings Stock Rose on Better-than-Expected Q4 Forecast

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Q4 earnings top estimates

Booking Holdings stock (BKNG) jumped over 6% in after-hours trading yesterday on its better-than-expected earnings outlook for the fourth quarter of 2018. The company revealed its fourth-quarter outlook during the third-quarter earnings release yesterday. The global leader in online travel and related services expects to report non-GAAP EPS between $18.90 and $19.40 for the fourth quarter. The guidance range was higher than the Wall Street analyst estimates of $18.81.

Furthermore, Booking Holdings projects revenues to grow in the range of 13%–16%. Considering the midpoint growth rate of 14.5%, the company’s top line is projected to come in at $3.209 billion, while analysts are forecasting revenues of $3.156 billion.

Apart from a healthy travel demand environment and the improving US economy, Booking Holdings’ sustained focus on investing in alternative accommodations, marketing, people, and technology, is likely to continue driving its top-line and bottom-line results.

The company ended its third quarter with over 5.7 million alternative accommodations listed in the form of apartments, homes, and other places to stay. The figure was 21% higher than the year-ago quarter level, and the company stated that room night growth from these accommodations was higher than its consolidated growth rate.

Glenn Fogel, CEO of Booking Holdings, said, “As we look to the fourth quarter, and beyond, we will continue to focus on making the right investments across our brands – in people, systems, and marketing – to continue to grow our business for the long term.”

Q3 in brief

Booking Holdings reported mixed results for the third quarter. Its top line surpassed Wall Street’s estimates, but the bottom line fell short of estimates. However, on a YoY basis, revenues and non-GAAP EPS both improved. The company’s revenues and non-GAAP EPS of $4.8 billion and $37.78 saw YoY growth of 11% and 7%, respectively. Booking Holdings stated that during the third quarter, it achieved a massive milestone of selling over 200 million room nights in a single quarter.

Booking Holdings’ arch-rival Expedia Group (EXPE) reported non-GAAP EPS of $3.65, which came in ahead of analysts’ estimates of $3.12 and marked a YoY improvement of 45.4%. Other competitors TripAdvisor (TRIP) and Ctrip.com International (CTRP) are scheduled to report third-quarter results tomorrow. Analysts’ non-GAAP EPS expectation of $0.48 for TripAdvisor implies YoY growth of 33.3%. Wall Street predicts Ctrip.com’s non-GAAP EPS will plunge 30% YoY to $1.89.

Booking Holdings makes up ~5% of the Invesco Dynamic Leisure and Entertainment ETF (PEJ).

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