Orbitz posts lower profit, cuts revenue outlook
(Reuters) - Online travel agency Orbitz Worldwide Inc (OWW.N) posted quarterly earnings that trailed forecasts on Tuesday as costs rose.
The company, which operates its namesake and CheapTickets brands in the United States and ebookers in Europe, pared a prior revenue outlook for 2013.
In the third quarter, 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 was nearly $13 million, or 11 cents a share, in the third quarter, down 12 percent from $14.8 million, or 14 cents a share, a year earlier.
Analysts expected profit of 13 cents a share on average, according to Thomson Reuters I/B/E/S.
Revenue was up 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.
Orbitz said it expected revenue of about $840 million for the full year, compared with an August forecast of $840 million to $850 million. The analysts' average estimate was $849.4 million.
(Reporting by Karen Jacobs in Atlanta; Editing by Gerald E. McCormick and Nick Zieminski)
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