Sabre Holdings Corporation has updated its financial projections for the fourth quarter of 2002, and provided guidance for the full year of 2003.
William J. Hannigan, Chairman and CEO, Sabre Holdings Corporation
With slower than expected travel demand, Sabre is lowering its forecast for fourth quarter earnings per share, excluding special items, to the range of $0.12 to $0.15, versus previous projections of $0.20 to $0.25.
Due to the change, the company also lowered its projections for full year 2002 earnings per share, excluding special items, to $1.77 to $1.80, from the previous projected range of $1.85 to $1.95. The company adjusted its guidance for full year EBITDA to approximately $430 million, and free cash flow to approximately $250 million. Sabre Holdings now expects full year 2002 revenues to be about $2.0 billion, or approximately negative four-percent growth, year over year, versus previous guidance of $2.0 billion to $2.1 billion.
“2002 was a challenging year for the industry, but nonetheless an important year for Sabre Holdings,” said William J. Hannigan
, Chairman and CEO, Sabre Holdings Corporation. “We extended our global leadership in several areas. We entered the year with a strong balance sheet, and we will exit the year with an even stronger balance sheet.”
2003 SABRE HOLDINGS OUTLOOK
The company projects its 2003 earnings per share, excluding special items, will be in the range of $1.78 to $1.88, or zero to five percent growth, year over year. On a GAAP basis, the company projects earnings per share to be in the range of $1.54 to $1.64, representing growth in the mid-single digits, year over year.
Additionally, the company projects 2003 revenues will be in the range of $2.1 to $2.2 billion, or four to nine percent growth, year over year. Operating earnings for 2003, excluding special items, are expected to grow in the range of zero to five percent, year over year. On a GAAP basis, operating earnings are expected to grow in the mid teens, year over year.
In other financial metrics for the full year, the company projected its cash balance at the end of 2003 will be approximately $1.1 billion, EBITDA to be greater than $475 million, and free cash flow to be greater than $250 million.
“While we expect to see an improved revenue picture in each of our four businesses in 2003, all indications are that the industry will continue to be demand-challenged,” said Hannigan.
“Similar to 2002, we expect earnings and cash flow generation will be very healthy. We plan to be more aggressive with our investments, particularly in product development and advertising for our faster-growing online companies.”
2003 OUTLOOK BY BUSINESS
Travelocity: Revenue growth for Travelocity is projected to be in excess of 40 percent, year over year. Travelocity is also expected to show significant improvement in operating earnings.
Get There: Revenue growth for GetThere is projected to grow 25 to 35 percent, year over year. Total transaction growth is expected to be over 35 percent, with growth of more than 70 percent in corporate transactions.
Travel Marketing and Distribution (TM&D): The TM&D business is expected to see flat to slight revenue growth, year over year, and expects a decline in margin. In 2003, Sabre will implement an effective average global booking fee increase of 2.9 percent. Carriers opting for Sabre`s discounted pricing offer will not see an increase. Based on current industry travel trends and market analysis, the company anticipates total global bookings for 2003 will be down two to three percent, year over year.
Airline Solutions: Revenue growth from the Airline Solutions business is projected to be in the 10 to 15 percent range with operating margins of approximately 10 percent.