UPDATE 2-Orbitz profit misses as air ticket sales fall
* Quarterly profit of 11 cents/share vs estimate 13 cents
* Trims full-year revenue forecast
* Shares fall as much as 23 pct
Nov 5 (Reuters) - Online travel agency Orbitz Worldwide Inc posted quarterly earnings that trailed forecasts as costs rose and said it expects revenue from its airline ticketing business to decline in the fourth-quarter.
Orbitz shares, which have tripled this year, fell as much as 23 percent in morning trading on Tuesday.
"Air volumes are lower in the US and in Europe as we focus marketing investments on hotel. This is reflected in the slightly lowered revenue guidance," Chief Financial Officer Mike Randolfi said on a conference call.
The company, which operates its namesake and CheapTickets brands in the United States and ebookers in Europe, said it expected revenue of about $840 million for the full year, compared with the $840 million-$850 million it had forecast in August.
Analysts on average were expecting $849.4 million, according to Thomson Reuters I/B/E/S.
"Because of the huge runup earlier in the year, people were hoping for better results and they didn't deliver, so the stock is getting hammered today," Ascendiant Capital analyst Edward Woo said, describing the stock fall as an over-reaction.
Third-quarter revenue from the air ticketing business fell 4 percent due to high ticket prices and lower volumes.
Expenses rose nearly 12 percent because of higher marketing costs and incentive-based pay. Net interest expense also increased due to a higher interest rate on term loans.
Net income fell to about $13 million, or 11 cents a share, from $14.8 million, or 14 cents a share, a year earlier.
Analysts expected a profit of 13 cents a share on average, according to Thomson Reuters I/B/E/S.
Revenue rose 11 percent to $220.9 million.
Gross bookings, or the dollar value of all travel services purchased, increased 5 percent to about $2.8 billion, aided by higher hotel and vacation package sales. Orbitz has been boosting revenue from hotels, which tend to be more profitable than airline tickets.
The company's shares were down 19 percent at $7.77 in afternoon trading on the New York Stock Exchange.
- Canada's parliament attacked, soldier fatally shot nearby |
- NOAA employee charged with stealing U.S. dam information
- Sweden gets two new sightings, as hunt for undersea intruder goes on
- Special Report: Traffickers use abductions, prison ships to feed Asian slave trade
- Autopsy of slain Missouri teen shows close-range gunshot