Expedia, Inc. (EXPE), Thursday reported a decline in profit for the fourth quarter, primarily reflecting higher expenses that more than offset a rise in revenues. Excluding one-time items, adjusted income for the quarter improved from last year, but fell short of analysts' estimates. Expedia shares declined more than 10 percent in after-hours trade, following the news.
The Bellevue, Washington-based online travel company's attributable net income for the fourth quarter declined to $71.3 million or $0.25 per share from $102.2 million or $0.35 per share in the previous year.
Results for the quarter include amortization charges of $11.62 million, stock-based compensation of $13.13 million, occupancy tax assessments and legal reserves of $5.54 million, gain on revenue hedges of $2.20 million and provision for income taxes of $7.40 million. Prior-year results include amortization charges of $9.72 million, stock-based compensation of $14.99 million, occupancy tax assessments and legal reserves of $6.55 million and provision for income taxes of $36.09 million.
Excluding one-time items, adjusted net income for the fourth quarter increased to $91.9 million or $0.32 per share from $88.5 million or $0.29 per share last year.
On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.36 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter rose 16 percent to $808.4 million from $697.5 million a year ago, driven by strong unit growth in both hotel and air businesses, and continued strong performance in advertising and media. Analysts estimated revenues of $802.31 million for the quarter.
Both worldwide hotel revenue and air revenue increased 15 percent, and advertising and media revenue increased 29 percent from last year.
Total costs and expenses for the fourth quarter rose 18 percent to $628.8 million from the previous year. Interest expense increased to $32.89 million from $20.60 million last year. Provision for income taxes increased to $42.72 million from $12.40 million last year.
Gross bookings for the quarter increased 14 percent to $5.755 billion year-over-year, driven primarily by 13 percent growth in transactions, 5 percent increase in average airfares and a 2 percent increase in hotel average daily rates. Domestic bookings increased 13 percent and international bookings increased 16 percent.
For the full year 2010, net income rose to $421.5 million or $1.46 per share from $299.5 million or $1.03 per share in the previous year. Adjusted net income increased to $494.8 million or $1.70 per share from $409.9 million or $1.37 per share. Total revenues for the year increased 13 percent to $3.35 billion from $2.95 billion a year ago. Analysts estimated earnings of $1.71 per share, on revenues of $3.34 billion for the full year.
On January 5, research firm Canaccord Genuity initiated 'hold' rating for the company stock, with a mean target of $31.75.
EXPE closed Thursday's regular trading at $25.69, up $0.26 or 1.02%, on a volume of 5.66 million shares on the Nasdaq. In after hours, the stock declined $2.57 or 10.00%, trading at $23.12.
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