Shares of Travelport Worldwide (NYSE:TVPT) were sliding today after the travel-commerce and tech-specialist company reported second-quarter earnings and got an analyst downgrade. The stock finished the day down 8.8%.
Travelport, which provides tech tools to travel agencies and providers like Booking Holdings, actually beat analyst estimates in the quarter. Overall revenue increased 8% to $662 million, topping estimates of $638.8 million, as sales from its Travel Commerce Platform, which makes up the vast majority of its business, increased 9%. The company said revenue growth accelerated in all of its regions, with "beyond air" revenue increasing 21%.
On the bottom line, adjusted earnings per share increased by a penny to $0.41, beating expectations for $0.40.
However, management acknowledged that macro environment headwinds would impact performance in the second half, due to issues like a heatwave in northern Europe and higher jet-fuel prices. Nonetheless, the company maintained its full-year guidance, calling for full-year revenue growth of 4% to 6%, and for adjusted earnings per share between a loss of 7% and a gain of 1%. Analyst estimates were within both ranges, but slightly above the midpoint of EPS guidance.
Despite the strong results, Bank of America Merrill Lynch still downgraded the stock to "underperform," as analyst John King said that valuation had run ahead of performance, and speculated that the loss of Tripsta as a client would impact its results in the second half. King also lowered his price target from $20 to $17.
Travelport had been on a run so far this year, up more than 50% before today's news. Taken in that context, a step back for the stock doesn't seem so unreasonable.