Earnings Releases

The SABRE Group Reports Third Quarter Results

FORT WORTH, Texas -- The SABRE Group Holdings Inc. (NYSE: TSG) today reported third quarter net earnings of $56 million, or $0.43 per share, an increase of 10.3 percent over 1996's pro forma third quarter results. Operating income was $88 million for the quarter, flat with pro forma operating income for the same period in 1996.

All 1996 pro forma amounts reflect the impact of new contracts with American Airlines, which were entered into July 1, 1996 (made retroactive to January 1, 1996), and the impact of certain other transactions resulting from the legal reorganization of the company in July 1996.

Compared to 1996 actual results, third quarter net earnings increased $11 million or 24.5 percent. Operating income was in line with the same quarter the previous year.

Revenue was $456 million for the quarter, an increase of 11.9 percent over 1996 revenue for the third quarter on both a pro forma and an actual basis.

"We had good revenue growth in the third quarter, despite the softness of domestic air bookings that is affecting the whole computer reservations system industry," said Michael J. Durham, The SABRE Group's president and chief executive officer. "At the same time, we've been making the investments in sales, marketing, and product development that we think are necessary to further increase the company's growth rate. Those investments have put pressure on our margins, resulting in flat year-over-year earnings."

For the nine months ended September 30, 1997, net earnings were $181 million or $1.39 per share, an increase of 10.4 percent over the same period last year on a pro forma basis, and an increase of 10.5 percent over the same period last year on an actual basis.

Revenue for the first nine months of 1997 was $1.3 billion, an increase of 8.3 percent over the same period last year on a pro forma basis, and an increase of 7.8 percent over the same period last year on an actual basis.

Operating income for the first nine months of 1997 was $289 million, an increase of 1.4 percent over the same period last year on a pro forma basis, and an increase of 1.2 percent over the same period last year on an actual basis.

"Our first year as a public company has been both rewarding and challenging," Durham added. "The letter of intent recently signed with US Airways for a multi-billion dollar long-term technology relationship further validates our long-term business strategy for growth in information technology services outside of AMR Corp. We're also encouraged by the many accolades being given for our newer travel distribution products: SABRE Business Travel Solutions for corporate customers and Travelocity, our travel planning and reservations Web site for consumers."

The SABRE Group is a world leader in the electronic distribution of travel and travel-related services around the globe, and is a leading provider of information technology solutions for the travel and transportation industry, including customized software development and software products, transaction processing, consulting and total information technology outsourcing.

The SABRE Group - Condensed Statements of Income - Three Months Ended September 30, 1997

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