What happened

Shares of Booking Holdings (BKNG -10.15%) stock -- the company formerly known as Priceline -- are surging, up 7.3% at $1,955 (yes, you read that right) as of 12:40 p.m. EDT Thursday after the purveyor of online reservations for hotels and plane tickets reported estimate-busting earnings for its fiscal second quarter of 2019 last night.  

Expected to earn $22.71 per diluted share on sales of $3.85 billion, Booking instead reported that it earned $23.59 (pro forma) on sales of $3.9 billion, a clear earnings "beat."

Green arrow trending up over the numerals 2019

Image source: Getty Images.

So what

Well, maybe not entirely clear. When calculated according to generally accepted accounting principles (GAAP), Priceline's earnings for the quarter were actually only $22.44 -- and to its credit, this is the number that Booking Holdings highlighted in its report. GAAP profits grew 11% year over year, faster than the company's 9% sales growth.

That being said, Wall Street analysts like to back out certain items from earnings reports, making it easier for companies to "hit their numbers." They gave their estimates for Booking's profits in pro forma format -- and Booking dutifully "beat earnings" by that same standard.

Now what

And things should only get better from here, at least from the perspective of profits. As CEO Glenn Fogel pointed out in Booking Holdings' report, the company is now preparing to move from "a solid start to the summer travel season" and transition into "our peak travel season" -- when the money should really flow.

In the third quarter, Booking believes it could earn anywhere from $42.60 to $43.60 per share (GAAP) and from $43.60 to $44.60 (pro forma), with sales up anywhere from 4% to 6% over Q3 2018 levels. Taken at the midpoint, that pro forma guidance exceeds the $43.97 per share that Wall Street will be looking for, though Booking's sales guidance is below the 8% growth Street analysts predict.

How will Wall Street react if that per-share result happens? Tune in three months from now to find out.