Yahoo Finance Sabre (SABR) Plunges 19% on Wider-Than-Expected Q4 Loss
Sabre SABR shares fell 19.4% on Wednesday after the travel technology company reported a wider-than-expected loss for the fourth quarter of 2022. Additionally, the dim top-line guidance for the first quarter of 2023 raises concerns for the slow post-pandemic recovery of Sabre.
The company’s adjusted loss was 36 cents per share, which came higher than the Zacks Consensus Estimate of a loss of 32 cents. However, the figure was narrower than the year-ago quarter’s loss of 47 cents per share.
Sabre reported revenues of $631 million for the fourth quarter, 26% higher than $501 million in the year-ago period. This year-over-year surge in the top line reflects a significant improvement in global air, hotel and other bookings. However, the top line fell short of the consensus mark of $673.9 million.
Sabre Corporation Price, Consensus and EPS Surprise
Sabre Corporation price-consensus-eps-surprise-chart | Sabre Corporation Quote
Quarter in Detail
The Travel Solutions segment’s revenues increased 27% year over year to $574 million, primarily on the gradual recovery of global air and other travel bookings, partially offset by the sale of the AirCentre portfolio in February 2022. 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 $417 million from $286 million in the fourth quarter of 2021. 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 $157 million, down 5% from the year-ago quarter’s $165 million. This decline was primarily due to lower revenues from a change in Russian law and lower Commercial and Operations revenues, primarily due to the sale of the AirCentre portfolio.
The aforementioned negative factors for IT Solutions’ dismal performance were partially offset by higher reservation revenues from the ongoing recovery in passengers boarded. The number of boarded airline passengers — a key revenue metric for the IT Solutions division — increased 30% year over year to 168 million.
The Hospitality Solutions segment’s revenues totaled $65 million compared with the year-ago quarter’s $54 million. This upside was mainly fueled by the increase in central reservation system transactions, which rose 16% to 27 million.
Sabre reported an adjusted operating loss of $30.3 million, significantly improving from the operating loss of $68.4 million posted in the year-earlier period. Adjusted EBITDA improved from a negative $26.4 million reported a year ago to a positive $1.5 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 $815.9 million compared with the previous quarter’s $804 million.
In the fourth quarter, Sabre generated operating and free cash flows of $38 million and $22 million, respectively. In the full-year 2022, the company utilized $276 million in cash for operational activities and generated negative free cash flow of $346 million.
Zacks Rank & Key Picks
Sabre currently carries a Zacks Rank #3 (Hold). Shares of SABR have decreased 53.2% over the past year.
Some better-ranked stocks from the broader technology sector are Clarivate Plc CLVT, RingCentral RNG and ServiceNow NOW, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Clarivate’s fourth-quarter 2023 earnings has remained unchanged at 17 cents per share over the past 60 days. For 2022, earnings estimates have been revised a penny northward to 81 cents per share in the past 60 days.
Clarivate's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.4%. Shares of CLVT have fallen 33% in the trailing 12 months.
The Zacks Consensus Estimate for RingCentral's first-quarter 2023 earnings has revised a penny upward to 62 cents per share in the past 60 days. For 2023, earnings estimates have been revised to $2.85 from $2.84 30 days ago.
RingCentral’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 10.1%. Shares of RNG have plunged 73% over the past year.
The Zacks Consensus Estimate for ServiceNow's first-quarter 2023 earnings has been revised northward by a penny to $2.02 per share over the past seven days. For 2023, earnings estimates have moved upward by a penny to $9.18 per share in the past seven days.
ServiceNow's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.9%. Shares of NOW have plunged 21.5% in the trailing 12 months.
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