Expedia posts lower profit but revenue beats
(Reuters) - Online travel agency Expedia (EXPE.O) reported a lower quarterly profit on Tuesday due to higher expenses, but revenue topped expectations as hotel and air-travel bookings rose.
Shares of Expedia were up more than 4 percent in extended trading after the bell from their $67.50 close on Nasdaq.
"The results overall were very strong and indicative of a company that's still got some pretty strong organic tailwinds," said Dan Kurnos, an analyst with Benchmark Company.
Expedia, whose brands include Hotels.com and Hotwire, has been spending on technology systems and international expansion to better compete against rivals like Priceline.com (PCLN.O).
The company said it expected adjusted earnings before interest, taxes, depreciation and amortization to rise this year, but cautioned that marketing spending on variable channels and emerging markets would also ramp up.
"We expect competitive intensity to increase" in 2013, Chief Executive Dara Khosrowshahi told a conference call with analysts.
Earnings in the fourth quarter totaled $6.7 million, or 5 cents a share, down from $70.3 million, or 51 cents a share, a year earlier.
Adjusted for items such as legal reserves and stock-based compensation, quarterly profit was $88.9 million, or 63 cents a share, the company said. Analysts on average expected 65 cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose 24 percent to $974.9 million, better than the $930.7 million analysts had forecast. International revenue jumped 35 percent while domestic revenue increased 15 percent in the fourth quarter.
Expenses rose on various fronts as selling and marketing costs climbed 25 percent to $393.6 million, while technology and content costs were up 31 percent to $134.3 million. General and administrative expenses rose 12 percent to $98.4 million.
Gross bookings rose 19 percent in the fourth quarter, driven by a 33 percent rise in hotel room nights and a 12 percent increase in air-ticket business.