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Earnings preview: What to expect when Booking Holdings reports Q2 results

Booking Holdings (NASDAQ: BKNG) will be reporting its second-quarter numbers Wednesday at 4:00 pm ET. The online travel company is estimated to have ended the first half of the year on a positive note, with analysts predicting a 6% increase in sales to $3.75 billion for the June quarter. The consensus earnings forecast is $22.69 per share, up 10% year-over-year.

The fact that earnings topped expectations in three out of the trailing four quarters indicates that the chances of another beat are high. Agency revenues will continue to benefit from solid international bookings, while merchant revenues will gain from the strength of Agoda and Rental Cars divisions.

Booking Holdings (BKNG) first quarter earnings, revenue decline

Though room night revenues are poised to benefit from improvements in the direct channel, economic uncertainties in the foreign markets and stiff completion can have a negative impact on performance. Also, higher costs, mainly advertising and marketing expenses, and unfavorable currency rates might weigh on the bottom line during the quarter.

While the Brexit-related uncertainties in Europe and the impact of the trade war on businesses remain a challenge for the company, it will be offset by the stable demand for international travel. Earlier, the management had forecast mid-single-digits growth in both room night booking and gross bookings for the second quarter, globally.

Related: Booking Holdings Inc. Q1 2019 Earnings Call Transcript

Booking Holdings had a weak start to the year, marked my unimpressive performance in the first three months. Earnings dipped 7% to $11.17 per share in the first quarter as revenue dropped 3% to $2.84 billion, reflecting lower sales at the agency segment, the company’s main growth driver.

Rival travel company Expedia (EXPE) last month reported a double-digit increase in second-quarter earnings, aided by strong booking growth that pushed up revenues by 9%. Meanwhile, TripAdvisor (TRIP) will be publishing results for its most recent quarter on Thursday before the opening bell.

Also see: CVS Health has the right prescription for growth

For the shares of Booking Holdings, it has been a rollercoaster ride for more than a year, losing about 5% during that period. Since the beginning of the year, the stock has gained around 4%.

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