Expedia 2Q profit falls but beats expectations
The online travel agency's profit fell 25 percent but easily beat expectations, and its shares rose sharply in after-hours trading Thursday.
Online travel agency Expedia's second-quarter profit fell 25 percent but easily beat expectations, and its shares rose sharply in after-hours trading Thursday.
Three-fourths of Bellevue-based Expedia's revenue comes from selling hotel bookings, and that business grew 16 percent as the company booked 22 percent more overnight stays. That more than offset a decline of 8 percent in airline-ticket revenue.
Expedia was also helped by growth in corporate travel fees and advertising revenue. And it paid a lower income tax rate — 21.3 percent compared with 27.3 percent a year ago — as it earned more money outside the U.S.
Before the results were released, Expedia shares gained $1.46, or 3.3 percent, to close at $45.71 in regular trading. In extended trading they jumped $6.13, or 13.4 percent, to $51.84.
Expedia's net income was $105.2 million, or 76 cents a share, compared with $140.4 million, or $1.01 a share, a year earlier.
The company said that excluding stock-based compensation expenses and other items, it would have earned 89 cents a share, compared with 72 cents a share on that basis a year ago.
Analysts expected the company to earn 71 cents a share on an adjusted basis.
Revenue rose 14 percent to $1.04 billion from $913.6 million. That also topped the forecast of analysts surveyed by FactSet, who predicted revenue of $987.3 million.
Bookings rose 13 percent, led by the surge in nights booked at hotels. However, revenue per hotel room slipped 5 percent partly due to more lower-priced rooms and discounting by the company's Hotwire brand.
Average airfares rose 5 percent, but lower payments from airlines resulted in Expedia getting 11 percent less per ticket.
Expedia said revenue from sources other than selling airline tickets and hotel rooms rose 17 percent, thanks to "strong growth" in corporate travel fees and advertising revenue.