Expedia Q4 Revenue Climbs 24%, Shares Jumped in Afterhours (EXPE)

ExpediaDespite earnings falling short of Street’s expectation due to rising costs, shares of Expedia Inc. (NASDAQ: EXPE) climbed almost 5% in aftermarket trading after the online travel  agency reported late on Tuesday better than expected revenue thanks to strong bookings for air travel and hotel accommodations .

In order to compete with more vigor against rivals such as Priceline.com, Expedia, whose product line include Hotels.com and Hotwire, has been enhancing its operations management  through spending more on technology and focusing in international expansion for increasing traction in travel industry.

For the fiscal fourth quarter, Expedia reported earnings of $6.7 million or 5 cents a share compared with $70.3 million or 51 cents a share, in the year earlier quarter.

After excluding onetime expenses such as legal reserves and stocks based compensation, adjusted earnings or non-GAAP earnings came at $88.9 million or 63 cents a share, two cents short of what  analysts’ polled by Thomson Reuters had forecasted.

Revenue during the period climbed 24% to $974.9 million, beating analysts’ consensus forecast for $930.7 million.

While revenue from international division leaped 35%, revenue from domestic business rose 15%, in the fiscal fourth quarter.

However, rising expenses across all fronts impacted margins. While selling and marketing expenses jumped 25%, expenses on technology and content costs climbed 31% to $134.3 million and general and administrative expenses increased 12% to $98.4 million.

During the period gross bookings increased by 19%, aided by 33% jump in bookings for hotel room nights and 12% rise in bookings for air tickets.

For the fiscal 2013, the Company expects adjusted earnings to grow; nevertheless, rising marketing expenses in across all business lines as well as emerging market could undermine profits, the company warned.

“We expect competitive intensity to increase (in fiscal 2013),” said Chief Executive Dara Khosrowshahi while addressing analysts and investors in conference call.



Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.