Airbnb stock drops after weak revenue guidance

1 year ago

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Airbnb stock sinks on Q3 earnings amid slashed guidance

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Airbnb stock drops after weak revenue guidance

Wed, November 2, 2022, 5:58 AM·2 min read

Airbnb (ABNB) beat Wall Street's revenue and earnings expectations in its third quarter earnings report on Tuesday, but the home-sharing platform's fourth quarter revenue forecast missed analyst's forecasts.

Airbnb's shares dropped about 3.5% on the news in after-hours trading.

Here are the company's earnings results, as compared to expectations compiled by Bloomberg:

Adjusted Earnings Per Share (EPS): $1.79 actual versus $1.53 expected

Revenue: $2.88 actual billion versus $2.83 billion expected

Nights and Experiences Booked: 99.7 million versus 99.9 million expected

Airbnb said that Q3 2022 was its "most profitable quarter ever." Nevertheless, the company said that it expects to see revenue of between $1.8 billion and $1.88 billion in the fourth quarter, with the lower end of this projection missing analysts' expectations of $1.86 billion.

Airbnb logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration

Airbnb faces a number of macroeconomic headwinds, from the strength of the U.S. dollar and inflation, to a hawkish Fed and the consumer slowdown. Foreign-exchange headwinds knocked 7% off of Airbnb revenue for the quarter, and erased 15% of net income.

"Our Q3 results demonstrate that Airbnb continues to drive growth and profitability at scale," the company said in a statement. "Regardless of continued macro uncertainties, we believe we’re well-positioned for the road ahead."

Travel CEOs have recently expressed optimism about their businesses, contending there's strong pent-up demand for their services following the COVID-19 pandemic.

Delta Air Lines CEO Ed Bastian said "tremendous demand" was helping its business when speaking with Yahoo Finance about its record-revenue quarter. Additionally, Hilton CEO Chris Nassetta said at the 2022 All Markets Summit we're entering a new "golden age of travel."

For its part, Airbnb predicts that its business could thrive during an economic downturn.

“Just like during the Great Recession in 2008 when Airbnb started, people are especially interested in earning extra income through hosting,” the company said in its shareholder letter.

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