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Why Sabre Stock Crashed 15% Today

By Rich Smith – Nov 2, 2021 at 12:54PM

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The pandemic continues to take its toll on this travel industry stock.

What happened

Shares of travel industry software provider Sabre (SABR 2.54%) are getting destroyed today, down 15.1% in the afternoon despite the company having just shared a strong third-quarter earnings report this morning.

Analysts had forecast Sabre would lose $0.55 per share on $445.9 million for the quarter. The news wasn't quite as bad as that, however. Sabre only lost $0.50 per share, although its sales came in a bit light at $441 million.  

Three red airplanes leaving contrails pointing down.

Image source: Getty Images.

So what

Sabre explained in its earnings press release that its "increase in revenue was driven by an increase in global air, hotel, and other travel bookings due to continued recovery from the COVID-19 pandemic," and argued that earnings "significantly improved versus prior year."

Still, sales didn't recover as fast as Wall Street had hoped they would. And of course, a loss is a loss, and Sabre's loss was pretty sizable -- even bigger than the pro forma number noted above suggests. When calculated according to generally accepted accounting principles (GAAP), Sabre lost $0.75 per share for the quarter, despite growing sales 58% year over year.  

Now what

Nor was Sabre able to offer any assurance that things will get better as the pandemic wanes. "Given the ongoing magnitude and the uncertainty related to the COVID-19 pandemic and its economic effects, Sabre has not given guidance at this time," said management.

Meanwhile, Wall Street analysts are forecasting continued losses in the fourth quarter, and for the whole of this year -- $2.16 per share in total. And they're forecasting further losses in 2022 besides -- $0.45 per share. No wonder investors are selling.  

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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