Booking Holdings Likely to Post Double-Digit Q4 Earnings Growth

Fourth-quarter expectations

Wall Street analysts expect Booking Holdings (BKNG) to deliver yet another strong financial performance in its fourth quarter of 2018 on February 27. For the to-be-reported quarter, analysts project adjusted EPS to increase 15.2% YoY to $19.42 from $16.86 reported in the year-ago quarter mainly driven by strong revenue growth.

Booking Holdings Likely to Post Double-Digit Q4 Earnings Growth

For the fourth quarter, analysts forecast revenues to increase 15% YoY to $3.22 billion. The company is expected to report revenue growth across all the three reportable segments. The Agency, Merchant, and Advertising & Other segments’ revenues are expected to grow 7.7%, 45.7%, and 5.1%, respectively, to $2.23 billion, $741.1 million, and $233.1 million.

Driving factors

Analysts believe Booking Holdings will continue benefiting from strong global travel demand, mainly in the US. A strong travel demand environment will likely have a positive impact on Booking Holdings’ fourth-quarter top-line and bottom-line results.

According to Technavio’s latest report, global online booking is projected to grow at a CAGR of 11% from 2018 through 2022. With its enriched global footprint, Booking Holdings is well positioned to benefit from increasing demand for online travel booking platforms. Additionally, the company’s sustained focus on investing in marketing, alternative accommodations, people, and technology, is likely to continue driving its revenues.

At the end of the third quarter, Booking Holdings had over 5.7 million alternative accommodations listed on its website in the form of homes, apartments, and other places to stay. Compared with the year-ago quarter, the figure was 21% higher, and the company stated that room night growth from alternative accommodations was much more than its consolidated growth rate.

Some of the major online travel agencies (IYW) have already reported their fourth-quarter 2018 results. Expedia (EXPE) recorded 48% YoY growth in its adjusted EPS, while TripAdvisor’s (TRIP) fourth-quarter EPS jumped 350%.

Another peer International (CTRP) will report its fourth-quarter results next month. Analysts project the company to report a loss per share of $0.22 compared to its earnings of $1.56 in the fourth quarter of 2017.