Why Sabre Earnings Might Not Be As Bad As First Thought

By Chris Lange Updated Jan 12, 3:04PM EST · Published Feb 7, 2:57PM EST

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Why Sabre Earnings Might Not Be As Bad As First Thought — © Thinkstock

[cnxvideo id=”625494″ placement=”ros”]Sabre Corp. (NASDAQ: SABR) saw itself as one of the biggest earnings losers on Tuesday after the company came out with its most recent report and hit a new 52-week low. However, a closer look at the earnings report would suggest that most of the results from this quarter are favorable. Investors may just be surprised initially by the mixed results and the unadjusted net income.

The company said that it had $0.27 in earnings per share (EPS) and $829.6 million in revenue, versus consensus estimates that called for $0.31 in EPS and $827.07 million in revenue. The same period from last year had $0.27 in EPS and $758.46 million in revenue.

Net income attributable to common stockholders totaled $24.6 million, compared to $129.4 million in the fourth quarter of 2015, a decrease of 81.0%. Although this comp is relatively high, it is primarily the result of a $106.2 million decrease in income from discontinued operations related to a one-time tax gain last year. Adjusted net income was more or less identical on a per share basis.

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For the fourth quarter, the company reported its segments as:

Airline and Hospitality Solutions revenue increased 15.0% to $266.4 million, with operating income increasing 23.6% to $61.8 million.
Travel Network revenue increased 7.1% to $569.1 million, and operating income increased 10.7% to $194.0 million.

In terms of guidance for the 2017 full year, the company expects to have EPS in the range of $1.31 to $1.45 and revenues to be in the range of $3.54 billion to $3.62 billion. There are consensus estimates that are calling for $1.59 in EPS and $3.61 billion in revenue for the coming year.

Sean Menke, President and CEO of Sabre, commented:

In 2016, we delivered a year of strong growth across all of our businesses. Travel Network delivered key agency conversions and increased global share. Airline and Hospitality Solutions executed key implementations and surpassed the billion dollar revenue benchmark for the first time resulting in strong overall revenue, adjusted profit and cash flow growth.

On the books, cash and cash equivalents totaled $364.11 million at the end of the quarter, versus $321.13 million in the same period from last year.

Shares of Sabre were last trading down 12% at $21.81, with a consensus analyst price target of $30.73 and a 52-week trading range of $21.42 to $29.76.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.