Booking Holdings (BKNG) reported mixed results for the fourth quarter of 2018, wherein its bottom-line results came in well ahead of analysts’ estimates, but the top-line missed estimates. However, on a YoY basis, both marked substantial improvements.
The company reported non-GAAP EPS of $22.49, which surpassed the Wall Street consensus estimate of $19.42 and registered a YoY increase of 33.4%. The robust YoY growth in its bottom line was mainly driven by higher revenues, lower taxes, and the reduced outstanding share count.
The company’s fourth-quarter revenues increased 14.6% YoY to $3.2 billion mainly driven by a strong performance across all its business segments including Agency, Merchant, and Advertising and Other. The Agency division’s revenues increased ~9%, Merchant unit sales grew 37.7%, and Advertising and Other business revenues improved by 14.5%.
Additionally, a robust 13% YoY increase in room nights booked also aided the overall revenue growth in the fourth quarter. However, a sluggish performance across rental car days and airline ticket bookings slightly offset the top-line growth. Adjusted EBITDA for the quarter came in at $1.26 billion, which surpassed the analysts’ estimate of $1.22 billion and registered a YoY increase of 17.4%. The adjusted EBITDA margin also improved 30 basis points to 39.1%.
A lower tax rate also aided Booking’s strong bottom-line results. The effective non-GAAP tax rate for the fourth quarter came in at 11.3%, which according to the company was substantially lower than the year-ago quarter’s level. The number of shares outstanding also declined to 46.6 million from 48.7 million in the year-ago quarter, which also boosted Booking’s fourth-quarter EPS.
Balance sheet and share repurchases
The company ended 2018 with cash, cash equivalents, and short-term investments worth $6.28 billion. During the last year, Booing generated operating and free cash flows of $5.33 billion and $4.9 billion, respectively. The company continued enhancing shareholder wealth through share buybacks. In 2018, Booking repurchased $5.97 billion worth of its common stock.
Major online travel agencies (IYW) TripAdvisor (TRIP) and Expedia (EXPE) have already reported their fourth-quarter 2018 results. TripAdvisor’s fourth-quarter EPS jumped 350%, while Expedia recorded 48% YoY growth in its adjusted EPS.
Booking’s other competitor Ctrip.com International (CTRP) is expected to report its fourth-quarter results in March. Wall Street analysts project the company to report a loss per share of $0.22 compared to its earnings of $1.56 in the year-ago quarter.