* Third-quarter profit rises as revenue falls
* Net revenue, adjusted EBITDA views cut
* Shares fall 11 percent
Nov 7 Orbitz Worldwide Inc on Wednesday
reported higher quarterly profit but cut its full-year forecast,
sending its shares down more than 11 percent.
The Chicago-based online travel agency, which owns the
CheapTickets and ebookers travel sites, said the downturn in
Europe slowed growth in hotel room nights. But it added that the
market was recovering.
Still, the company cut its full-year forecast for net
revenue and adjusted earnings before interest, taxes,
depreciation and amortization, citing marketing challenges with
its U.S. consumer business.
"This is a company that really can't afford to make too many
mistakes because Priceline and Expedia are
pulling away in the travel space," said Daniel Kurnos, an
analyst with Benchmark Co.
He said U.S. airline consolidation and capacity cuts would
continue to pressure Orbitz, which derives more than 30 percent
of its revenue from air travel but is seeking to increase its
share of revenue from hotels.
Orbitz said it expected net revenue of $772 million to $778
million and adjusted EBITDA between $124.5 million and $129.5
million for the full year.
That would represent growth of less than 1 percent to 1.5
percent over net revenue of $766.8 million in 2011. For adjusted
EBITDA, the revised forecast would represent a drop of about 1.9
percent to growth of 2 percent over $126.9 million last year.
In August, Orbitz forecast that full-year net revenue would
rise 2 percent to 4 percent, while adjusted EBITDA would be flat
to up 5 percent.
In the third quarter, growth in hotel and vacation package
revenue offset falling air travel revenue, and Orbitz cut
Net income came to $14.8 million, or 14 cents a share, for
the quarter, compared with $11.2 million, or 11 cents a share, a
Adjusted for items, profit was 13 cents a share, compared
with 7 cents expected by analysts, according to Thomson Reuters
Net revenue fell 2 percent to $198.3 million in the quarter,
compared with $200.9 million expected by analysts.
Gross bookings fell 7 percent. Hotel and vacation package
revenue rose 4 percent and 3 percent, respectively, in the
quarter while air net revenue fell 3 percent.
Orbitz also said on Wednesday that Mitch Marcus, who most
recently held a financial post at Sara Lee Corp, would become
chief financial officer as of Nov. 12. David Belmont, who had
served as interim finance chief since June, will return to his
post as group vice president, financial planning and analysis,
the company said.
Shares of Orbitz were off 30 cents, or 11.5 percent, at
$2.30 in afternoon trading as the broader market sold off.
Priceline.com was down 1.2 percent to $636.95 and Expedia fell 2
percent to $59.37.