Key Takeaways:
- Booking Holdings Inc. cautioned about the negative effects of Middle East conflict and currency issues on its current-quarter and yearly results.
- The online travel company expects both room night growth and gross bookings to suffer due to these factors.
- Additionally, Booking Holdings announced its inaugural quarterly dividend, set at $8.75 per share.
- This dividend declaration underscores the company’s commitment to providing returns to its shareholders amidst challenging market conditions.
Booking Holdings Inc. (BKNG) warned investors about the negative effects of the ongoing war in the Middle East and currency fluctuations on reservations and gross bookings. Consequently, the company’s shares slumped by about 10% on Friday afternoon.
Chief Financial Officer (CFO) David Goulden provided prepared remarks after the closing bell on Thursday, indicating that the online travel site expects current-quarter room night growth to be in the range of 4% to 6%. He mentioned that the Middle East war is anticipated to have a negative 1% impact on room night growth.
Goulden also disclosed that full-year gross bookings are forecasted to increase slightly faster than 7%, falling short of analysts’ expectations of a 9.9% gain. He attributed this miss to the effects of the war and unfavorable currency rates.
In the fourth quarter, Booking Holdings reported earnings per share (EPS) of $6.28, accompanied by a revenue increase of 18% to $4.78 billion. Both figures surpassed forecasts.
Room nights booked advanced by 9% year-over-year, while gross travel bookings saw a gain of 16% to reach $31.7 billion. Goulden highlighted that the company’s cancellation rate for the latest quarter was “slightly higher” compared to 2022, citing the impact of the war in the Middle East.
Additionally, Booking Holdings announced its initiation of an $8.75-per-share quarterly dividend, scheduled to commence on March 28 for stockholders of record on March 8.
Despite the decline in shares following the earnings report, Booking Holdings had reached an all-time high before the announcement. Even with Friday’s declines factored in, the shares are still up approximately 44% year-over-year, indicating strong performance over the past year.