On Thursday morning, Booking Holdings (NASDAQ:BKNG) -- formerly Priceline Group -- reported second-quarter 2018 results that easily beat the guidance it gave a few months ago. Management gave a cautious outlook for the back half of the year, though, which caused shares to fall following the report. However, this has become par for the course for Booking. If history repeats itself, the pullback is a great buying opportunity.

The quarter's numbers

Metric

Q2 2018

Q2 2017

Change (YOY)

Revenue

$3.54 billion

$3.02 billion

17.2%

Total gross travel bookings

$23.9 billion

$20.8 billion

14.9%

Earnings per share

$20.13

$14.39

39.9%

Adjusted earnings per share

$20.67

$15.14

36.5%

Chart by author. Data source: Booking Holdings quarterly earnings.

Gross travel bookings -- the total value of travel services and accommodations booked on the company's family of websites -- easily beat management's 10% to 14% growth estimate given during the first-quarter report. Combined with a boost from exchange rates (most of Booking's business is done outside of the U.S.), total revenue was up more than 17%.

Disciplined advertising, cost control, and share buybacks were the reason for the big jump in earnings per share, which smashed management's guidance of about 10% growth. There was a one-time gain in the company's equity investments, but adjusting for that still yielded a whopping 36.5% gain in the bottom line. There were 2.4% fewer shares outstanding compared with last year due to the company's repurchase program.

What happens next?

In spite of Booking's stellar numbers, shares fell more than 5% because of another soft forecast. Total gross bookings are expected to climb 3% to 6% in the third quarter, leading to 6% to 9% growth in revenue and 4% to 7% growth in earnings per share. Those are underwhelming figures considering the pace the company has set over the years, but it's always worth bearing in mind management's habitual overly-cautious tone.

A man and woman in chairs on a tropical white-sand beach.

Image source: Getty Images.

It's also important to consider that while the forecast was downbeat, management was still excited about the company's growth prospects in the world travel industry. As outlined at the end of 2017, Booking is working on a more holistic platform to combine all of its various services into a one-stop shop for vacationers. It's still early days, and specific details have been sparse up to this point, but the company is busy behind the scenes bridging its various websites and services in a smart way.

For example, RentalCars.com was already moved under the flagship Booking.com site, and Agoda.com and Priceline.com are doing back-end work with each other. Progress also continues in adding unique properties outside of the traditional hotel segment on Booking.com. These unique listings (think Airbnb-type accommodations) are the fastest growing segment of Booking's room-night business.

China has also been a key area of focus through the Agoda site. Booking acquired HotelsCombined during the quarter to boost its presence in Asia even further. The new member of the family will report to the meta-search KAYAK segment. A partnership deal with China's Didi Chuxing ride-hailing service was also signed last quarter, further increasing Booking's presence in the world's most populous country by integrating its travel services directly into the Didi app.

Thus, even though guidance seemed weak, Booking's solid second-quarter numbers and expansion efforts can give investors hope that this was just another round of cautious commentary. The stock drop looks like nothing more than another chance for investors to scoop up shares of a best-in-class travel company at a big discount from just a few days ago.

Nicholas Rossolillo and his clients own shares of Booking Holdings. The Motley Fool owns shares of and recommends Booking Holdings. The Motley Fool has a disclosure policy.