Booking Holdings Profit Falls to $2.72 Billion as Third Quarter Revenue Slips 1 Percent to $8.89 Billion

Booking Holdings posted a third quarter profit of $2.72 billion, as revenue fell 1 percent to $8.89 billion from $9.01 billion a year earlier. Earnings were $3.61 a share on a GAAP basis.

The quarter split in two directions. Adjusted earnings beat estimates, while reported revenue missed them, after a large reduction tied to a matter with the Federal Trade Commission. The online travel company also logged lower profit and sales as global travel demand slowed, and its stock slipped in afterhours trading.

Earnings beat, revenue miss

On an adjusted basis, Booking Holdings earned $4.66 a share. That beat the Zacks Consensus Estimate of $4.48 a share, an earnings surprise of plus 4.02 percent, according to Zacks. Adjusted earnings a year ago were $3.98 a share, so the adjusted figure rose from a year earlier even as the GAAP profit and the revenue line fell.

Revenue told the other half of the story. The $8.89 billion total missed the Zacks Consensus Estimate by 7.01 percent, even as adjusted earnings beat. The company reported both in the same quarter.

The FTC reduction and gross bookings

Revenue was reduced by about $900 million tied to an FTC matter. Set against reported revenue of $8.89 billion, a reduction of that size is a material part of the quarter, and it sits inside the reported total that came in below estimates.

Gross bookings were $54.5 billion in the quarter. That figure, reported alongside the results, measures the travel booked through the company in the period, while the $8.89 billion in revenue is what the company itself recorded as revenue for the quarter. The two numbers are different measures, and the results reported both: gross bookings of $54.5 billion, revenue of $8.89 billion, and profit of $2.72 billion.

Demand and the share reaction

The company logged lower profit and sales as global travel demand slowed due to persistent geopolitical tensions, the Wall Street Journal reported in its afterhours earnings roundup. The stock slipped about 1.7 percent in afterhours trading.

That reaction matched the split in the numbers. The adjusted earnings beat gave investors one reason to buy. The revenue miss, the $900 million FTC tied reduction and the slower demand the Journal described gave them reasons to sell.

What the quarter adds up to

Booking Holdings earned $2.72 billion in the third quarter, or $3.61 a share on a GAAP basis and $4.66 a share on an adjusted basis. Revenue fell 1 percent to $8.89 billion from $9.01 billion a year earlier, a drop of about $120 million on the reported line. Gross bookings were $54.5 billion.

The results leave the company with a clear pattern to explain in the quarters ahead: adjusted earnings above estimates, reported revenue below them, and a $900 million revenue reduction tied to the FTC matter recorded in this quarter.