OK, EXPE can join in any time now...
Sabre Cuts Profit Forecast
Tuesday March 11, 4:18 pm ET
By Peter Henderson
LOS ANGELES (Reuters) - Travelocity.com owner Sabre Holdings Corp. on Tuesday cut its profit forecast for the first quarter, saying fears of a war in Iraq and economic and political problems in Latin America had reduced travel.
"When the tanks started rolling up in front of Heathrow, we started to see bookings and trips fall off in a fairly meaningful way," Chief Executive William Hannigan told investors in a conference call, describing defensive measures at London's main international airport.
Sabre (NYSE:TSG - News) shares fell over 3 percent Tuesday and other online travel sites also declined, with Expedia Inc. (NasdaqNM:EXPE - News) down nearly 2 percent and Hotels.com (NasdaqNM:ROOM - News) was off nearly 4 percent by the close.
Online air travel booking site Travelocity.com is Sabre's best-known product among consumers, but it makes its profit and the bulk of its revenue from its system used by travel agents.
"That is where we are seeing the down year-over kind of performance," the CEO said, adding Travelocity and Sabre corporate Web offerings would grow in 2003.
The company, which is also expanding its hotel offerings on Travelocity, now sees a profit of 32 cents to 36 cents per share in the first quarter, down from a prior forecast of 41 cents to 46 cents.
Excluding special items, Sabre sees earnings of 38 cents to 42 cents per share, below its previous forecast of 47 cents to 52 cents and compared with the analysts average outlook of 48 cents a share, according to Thomson First Call (News - Websites).
Revenue would fall 4 percent to 7 percent in the quarter, compared with the previous forecast of between a 2 percent decline and a 2 percent rise, the company said, adding it was not changing the full-year outlook, since it was not clear if current travel trends would continue.
The travel slowdown did not shock many investors. Sabre had warned recently of weakness and No. 3 U.S. airline Delta Air Lines Inc. (NYSE:DAL - News) on Monday had warned that anxiety about a possible war in the Middle East had made travelers reluctant to journey far from home.
CIBC World Markets analyst Paul Keung said Sabre talked about the current difficulties at a conference last month, limiting the downside for the stock on Tuesday.
The shares have fallen almost 8 percent since Feb. 25, when the company first mentioned the negative trends in a regulatory filing and fell 52 cents to $15.00 on the New York Stock Exchange (News - Websites) Tuesday, while Expedia was off 55 cents at $33.78, Hotels.com was down $1.79 at $44.25 and Priceline.com was flat at $1.29 on Nasdaq. (Additional reporting by Lauren Weber in New York) |
