* Cuts organic EBITDA growth outlook for 2013
* Cites weakness in Hotwire due to higher rental car rates,
* 1st-qtr adjusted profit $0.25 beats estimates of $0.23
April 25 Online travel agency Expedia Inc
warned of a lower full-year profit from its discount
travel website Hotwire due to higher car rental rates and
Expedia shares, which rose 5 percent in extended trading
after it reported a higher-than-expected first-quarter adjusted
profit, reversed course when the company talked about challenges
at its Hotwire business on a post-earnings conference call.
Expedia reduced its forecast for growth in organic earnings
before interest, taxes, depreciation, and amortization (EBITDA)
by $20 million-$30 million, citing weakness at Hotwire.
The company, however, reaffirmed its overall 2013 forecast
for adjusted EBITDA of growth in the low double digits due to
strong performance at trivago - a German travel site in which it
acquired a majority stake earlier this year.
Expedia said troubles at Hotwire began with superstorm Sandy
The recent consolidation in the car rental industry made
matters worse as it drove up rental rates, discouraging its
price-sensitive customers, Expedia said on the call.
Hertz Global Holdings Inc bought smaller rival
Dollar Thrifty last year for $2.6 billion, leaving just three
players to control about 95 percent of the U.S. car rental
"There certainly was incremental weakness in the first
quarter (at Hotwire)," Chief Financial Officer Mark Okerstrom
said on the call.
"With respect to the full year impact, we are basically
forecasting that we do not see any material change from what we
have seen to date. We have no reason to believe that things will
He said Hotwire was also hurt by heavy advertising by its
competitor. Expedia's rivals include Priceline.com Inc
and Orbitz Worldwide Inc.
Expedia's adjusted net income fell to $35.3 million, or 25
cents per share, in the quarter ended March 31 from $36.9
million, or 26 cents per share, a year earlier. ()
Revenue jumped 24 percent to $1.01 billion.
Analysts on average had expected earnings of 23 cents per
share on revenue of $967.7 million, according to Thomson Reuters
The profit beat was due to strong growth in hotel bookings.
Gross bookings increased 16 percent. Bookings for hotel
rooms rose 28 percent, while those for air tickets increased 9
Expedia stock, which has more than doubled since the
beginning of 2012, fell 5 percent to $61.77 in after-hours
trading. The shares closed at $64.97 on the Nasdaq on Thursday.