Travel Technology Firm Fort Worth Warns of Loss for Fourth Quarter

FORT WORTH, Texas—Sabre Holdings, the travel technology company, said it may report a fourth-quarter loss because of the industry`s slow recovery after the Sept. 11 terrorist attacks.


“We expect travel bookings to be down 20 to 30 percent for the fourth quarter,” Sabre Chief Executive Bill Hannigan said. He added that the end of the year is a seasonally slow period for travel.


With the significant drop in business, Hannigan estimated Sabre`s earnings per share would range from a profit of 5 cents a share to a loss of 15 cents a share. However, the company would not give more specific earnings predictions for the fourth quarter or for the 2002 fiscal year.


The Fort Worth travel technology company reported third-quarter earnings of $56.1 million, or 42 cents a share, up 26 percent compared with $44.4 million, or 34 cents a share, in the same period last year. Revenues were up slightly to $524.8 million compared with $495.6 million in the third quarter of 2000.


Sabre said travel bookings worldwide were down 1.5 percent before Sept. 11. But since the attacks, worldwide travel bookings were down 45 percent, Hannigan said.

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Analysts said Sabre`s future earnings are uncertain because revenues could fluctuate because military action could derail the travel industry`s recovery.


Travel bookings had rebounded to only 20 percent lower than usual but dropped to 30 percent lower than usual after the United States started bombing Afghanistan, the company said.


“Sabre sounded positive, but if you look through to the actual numbers they gave, it wasn`t quite as bullish,” said Jennifer King, assistant vice president at Merrill Lynch. “It really comes back down to when is travel going to rebound, and that is something very much out of Sabre`s control.”


Shares of Sabre were up 97 cents, or 3.46 percent, closing at $29.01 Thursday.


Excluding one-time items, Sabre reported earnings of $52.6 million, or 39 cents a share, which was slightly lower than analysts` earnings estimates of 40 cents a share, according to First Call.


Sabre had several one-time items, including a pre-tax gain of $62.8 million for the sale of its infrastructure assets to Electronic Data Systems of Plano; a $47.3 million pre-tax gain from its sale of one million France Telecom shares; a $73.3 million charge related to acquisition expenses and a $6 million charge from the shutdown of Sabre Marketplace.


In July, Sabre closed the $660 million sale of its information technology outsourcing division to EDS. As part of the deal, about 4,000 Sabre employees transferred to the data company.


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