Online travel agency Expedia, Inc. (EXPE), Thursday said its second quarter profit more than tripled from a year ago, helped by a 19% rise in bookings and substantial rise in hotel, advertising and media revenues. Earnings for the quarter came in above estimates, while revenues fell short.
Net income attributable to Expedia jumped to $114.26 million or $0.40 per share from $40.90 million or $0.14 per share in the same quarter a year ago. Compared to the sequential first quarter, profit for the quarter was up 92%.
After excluding stock based compensation and other items, net income for the quarter was $129.29 million or $0.44 per share. In the prior year quarter, adjusted net income was $113.70 million or $0.38 per share.
On average, 18 analysts polled by Thomson Reuters expected earnings of $0.42 per share for the quarter. Analysts' estimate typically excludes one-time items.
Earnings were benefited from the absence of expenses related to occupancy tax assessment and legal reserves and restructuring charges of $74.21 million and $6.10 million, recorded respectively in the year-earlier quarter.
Expedia's revenue increased 8% to $833.96 million from $769.77 million in the year-earlier quarter, but missed Street estimates of $845.48 million. Revenues were up 16.2%, when compared to the sequential first quarter.
Revenues were driven primarily by an increase in advertising & media revenues and hotel revenues. Domestic revenue were up 9%, while international revenue increased 8%.
Revenue as a percentage of gross bookings was 12.5%, a decrease of 121 basis points, compared to the second quarter of 2009, due primarily to a higher mix of air bookings.
Worldwide hotel revenue increased 4%, air revenue increased 13%, and advertising and media revenue increased 39%.
As a percentage of worldwide revenues, hotel accounted for 63%, advertising & media accounted for 13%, while air and all other revenues each accounted for 12%.
Operating income for the second quarter surged to $193.69 million from $114.64 million in the prior-year quarter.
Gross bookings for the quarter were up 19% at $6.68 billion, compared to $5.62 billion in the same quarter last year, driven primarily by 10% growth in transactions and a 17% increase in average airfares.
Amongst others in the industry, Priceline.com Inc. (PCLN), in its first quarter, reported profit that surged to $53.9 million or $1.06 per share from $25.0 million or $0.53 per share in the same quarter last year. Revenue for the quarter was $584.4 million, up 26.5% from $462.1 million in the comparable quarter.
On July 15, 2010, brokerage FBR Capital initiated an 'Outperform' rating on EXPE shares, with a mean target of $28.47.
EXPE closed Thursday's regular trading at $21.07, down $0.23 or 1.08%, on a volume of 6.32 million shares. In after-hours, the stock further dropped $0.22 or 1.03%, to trade at $21.08. In the last 52-week period, the stock traded in a range of $18.07 - $27.51, with a three-month average volume of 6.07 million shares.
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