<B> Tech Stocks Look Bullish</B>
By Cheryl Rosen
<I>New York</I> - If the other CRSs are watching the stock performance of The Sabre Group and Galileo International before deciding whether to follow their lead and go public, it's a good guess that we'll see Amadeus and Worldspan public offerings in the coming months.
With Wall Street in general feeling bullish about technology, both Sabre (which trades under the initials TSG) and Galileo (GLC) stocks closed at record highs this month. Sabre--which over the past 12 months has traded as low as 24-1/2--closed recently at 38-5/8 before settling down in the 37 range.
Galileo, which has been trading as low as 22, also has headed up, hitting a high of 40 last month before falling slightly to the 36-plus range. Galileo also announced a 25 percent raise, to .0075 cents per share, in the quarterly dividend it will be sending its stockholders, effective May 22.
Yahoo's Finance Website rated Galileo a 1.07 on a scale of one to five, where one is a "strong buy" and five is a "strong sell." Five out of six of Yahoo's analysts recommended Galileo as a "strong buy."
Sabre was rated 2.14, up from 2.17 earlier last month, with two analysts calling it a "strong buy," two a "moderate buy" and two rating it a "hold."
In its first quarter financial report, Sabre reported revenue growth of 11.7 percent in its electronic distribution unit, Sabre Travel Information Network--and a whopping 59 percent increase for Sabre Technology Solutions, its technology outsourcing division. STS has signed a number of technology contracts with other airlines, including a huge one with US Airways, since spinning off from American Airlines.
Sabre booked 96 million CRS reservations itself, plus 8 million more for its joint-venture partners. In all, it generated record revenues of $554 million for the first quarter, up $25.8 percent over first quarter 1997. Net earnings were up 7.7 percent, to $72 million. Sabre Group president and CEO Michael Durham attributed the healthy results to "the start of our work on the US Airways outsourcing contract, growth in international air bookings--particularly in Latin America--and non-air bookings, and a booking fee price increase." International and non-airline reservations--i.e., for hotel and car--were up 9.5 and 8.5 percent, respectively, while domestic reservations fell 1.5 percent.
Galileo's net income rose 28.2 percent, with international bookings up 9.4 percent.