Expedia Inc. (EXPE), the world's largest online travel company, said Thursday after the markets closed that its fourth quarter profit declined slightly from last year, as higher costs and expenses offset a 7% increase in revenue. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but is quarterly revenue fell short of analysts' forecast.
The Belllevue, Washington-based company reported net income for the fourth quarter of $70.3 million or $0.51 per share, compared to $71.3 million or $0.50 per share for the year-ago quarter.
Income from continuing operations for the fourth quarter was $59.7 million or $0.44 per share, compared to $63.4 million or $0.45 per share in the prior year quarter.
Excluding items, adjusted income from continuing operations was $0.58 per share in the fourth quarter, compared to $0.58 per share in the fourth quarter of last year.
On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.54 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Total costs and expenses for the quarter surged 12% to $664.4 million from $591.9 million a year ago. Expedia, which competes with Priceline.com Inc. (PCLN) and Orbitz Worldwide Inc. (OWW), said revenue for the fourth quarter rose 7% to $787.13 million from $737.59 million in the same quarter last year. Fifteen analysts had a consensus revenue estimate of $811.63 million for the fourth quarter.
Gross bookings for the fourth quarter increased 10% from a year earlier, mainly driven by 19% growth in hotel room nights through strong performances at Hotels.com brands, Expedia Affiliate Network, Hotwire and Egencia. Average daily room rates grew 2% for the quarter.
Average airfares for the fourth quarter were up 10% year-over-year , but was almost entirely offset by an 8% decline in tickets sold, the company said.
For the fourth quarter, domestic bookings increased 7% and international bookings rose 15%.
Hotel accounted for 73% of total worldwide revenue in the fourth quarter, while air accounted for 9% and all other revenue sources accounted for the remaining 18%.
Worldwide hotel revenue increased 12% for the fourth quarter driven by a 19% increase in room nights stayed partially offset by a 5% decrease in revenue per room night.
Worldwide air revenue fell 19% for the fourth quarter due to an 11% drop in revenue per ticket and an 8% decrease in air tickets sold.
In November, Expedia acquired China-based Renren Inc.'s (RENN) stake in Chinese online travel firm eLong Inc. (LONG), increasing its stake in eLong to 67%.
During the fourth quarter, Expedia also acquired Traveldoo, a European provider of best-in-class self-booking tools and services for business travel management.
In December, Expedia completed the spin-off of TripAdvisor, Inc. to Expedia shareholders. TripAdvisor consists of the domestic and international operations previously associated with Expedia's TripAdvisor Media Group and is now a separately traded public company, trading under the symbol "TRIP" on The Nasdaq Global Select Market.
TripAdvisor said Wednesday that its fourth quarter profit increased 19% from last year to $22.0 million, while its fourth quarter revenue rose 30% to $137.8 million. However, the company's quarterly earnings per share of $0.16 came in below analysts' expectations of $0.24.
Expedia shares closed Thursday's regular trading session at $34.16, up 51 cents or 1.52%, but lost $1.80 or 5.27% in after hours trading.
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