Capital Calls: Airbnb

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- Airbnb earnings

- BP

Room upgrade. Airbnb might have more staying power than the travel industry itself. The $97 billion vacation-booking platform’s post-pandemic bounce-back looks set to make it more profitable than ever. Being asset-light makes it nimble, but Chief Executive Brian Chesky took necessary risks.

Airbnb adapted to a world of lockdowns and travel restrictions, as bookings shifted away from densely packed cities and refocused on domestic getaways rather than hopping borders. After dipping in 2020, last year’s nearly $6 billion of revenue came in roughly 25% above 2019. Results released Tuesday show growth gathering steam: Revenue is up 70% year-over-year to $1.5 billion for the quarter.

Profitability has improved, too, with EBITDA swinging to positive territory, to $229 million. This is key. Fast-growing disruptors are often reluctant to cut costs. But Chesky tightened Airbnb’s belt, including the tough decision to fire 25% of staff. It takes Airbnb out of the danger zone of high-flying former unicorns stumbling over the transition to profitability – whether or not investors give it an upgrade. (By Jonathan Guilford)

Excess baggage. Bernard Looney’s first de-Russified results should be a cause for celebration. While the BP boss had to swallow a $24 billion hit from writing the value of his 20% Rosneft stake to zero, he also made $6.2 billion of underlying first-quarter earnings from sky-high oil and gas prices. Besides beating analyst expectations by 39%, that let the $100 billion UK oil major cut its net debt and reduce the hit to its balance sheet from quitting Russia.

There’s such a thing as doing too well, though. Politicians hunting for windfalls to tax in Spain and Italy are struggling for lucrative targets – many electricity groups are not reaping bumper profits after selling their power forward when prices were lower. BP’s first-quarter earnings, however, dwarf 2021’s $2.6 billion. Looney’s promise of $23 billion of extra UK investment this decade looks like a response to finance minister Rishi Sunak’s public intimations of a windfall tax. Prime Minister Boris Johnson admittedly appears to be against a raid. But with a further $2.5 billion of share buybacks announced on Tuesday, BP may yet get thwacked. (By George Hay)