What happened

Shares of Booking Holdings (NASDAQ:BKNG) -- still probably best known for its Priceline website -- jumped more than 7% in early trading Friday, before settling down to something closer to a 1.9% gain as of 11:50 a.m. EDT today.

I can't entirely explain the big jump -- but I expect that the relapse to a lower valuation has something to do with the earnings that Booking reported Thursday night.

Origami dollar pointing up

Image source: Getty Images.

So what

For fiscal Q1 2019, Booking reported a 3% decline in sales to $2.8 billion, with earnings on those sales of $16.85 per diluted share. This was up 37% from last year's Q1 (which may explain investors' initial enthusiasm), but apparently fell just short of analyst estimates (which would explain the subsequent relapse in the share price).

Sales for the quarter also fell short of estimates.

Despite the earnings and sales misses, CEO Glenn Fogel called Q1's results "a solid start to the year," highlighting Booking's 10% growth in room nights booked during the quarter, illustrating the company's shift from an emphasis on selling plane tickets, to selling hotel reservations.

Now what

As for why Booking made that change, you need only look to management's guidance for Q2 2019, currently underway. Booking is predicting that revenue from travel bookings -- plane tickets -- will be basically flat year over year, ranging from 1% growth to 1% shrinkage. Hotel reservation revenue, on the other hand, is expected to grow a solid 6% to 8%, averaging out to total revenue growth for the company of 4% to 6%.

That actually might come as a disappointment to investors (although they don't seem to realize it yet), because on Wall Street, analysts are still calling for better than 7% sales growth in Q2. Similarly, analysts predict Booking will earn $22.44 per share this quarter, whereas management's guidance for pro forma profits from $22.15 to $22.60 ($22.38 at the midpoint) suggests Booking could fall short on profits again three months from now.