(Reuters) - U.S. online travel services company Expedia Inc missed analysts’ quarterly profit estimate on higher marketing expenses, sending its shares tumbling 15 percent in after-hours trading on Thursday.
The company, which includes brands Expedia.com, Hotels.com and Hotwire, said selling and marketing costs jumped 16 percent to $1.12 billion in the fourth quarter.
“The year did not end up as we planned from a financial perspective,” Chief Executive Mark Okerstrom said in the company’s quarterly earnings call.
Through 2018, the company forecast that selling and marketing costs would continue to outpace revenue growth.
This is the first full quarter under Okerstrom, who succeeded Dara Khosrowshahi after he left to take the top job at car-ride provider Uber Technologies Inc last year.
On an adjusted basis, Expedia earned 84 cents per share in the fourth quarter, falling well short of analysts’ average estimate of $1.15, according to Thomson Reuters I/B/E/S.
Expedia’s HomeAway vacation rental business, a rival to Airbnb, reported a 16 percent jump in revenue to $193 million in the fourth quarter, compared with analysts’ average estimate of $225.4 million, according to Thomson Reuters I/B/E/S.
Expedia’s previous quarterly report was equally disappointing to investors when reported last year, though that period included headwinds from a rash of disruptive hurricanes off the Atlantic in addition to brand shortcomings.
Trivago GmbH, majority owned by Expedia, reported a bigger-than-expected fourth-quarter loss on Wednesday as the hotel search platform spent more on sales and marketing.
“Trivago does face extremely tough revenue and profitability comps through the first half of 2018,” Okerstrom said on the Thursday call.
Expedia said it was expecting a negative profit contribution from the Trivago brand this year.
Bellevue, Washington-based Expedia said gross bookings rose 13.6 percent to $19.8 billion.
Net income attributable to Expedia declined to $55.2 million, or 35 cents per share, from $79.5 million, or 51 cents per share, a year earlier. (bit.ly/2EcS9rE)
The company’s revenue rose to $2.32 billion in the three months ended Dec. 31, from $2.09 billion.
Reporting by Sanjana Shivdas in Bengaluru and Alana Wise in New York; Editing by Sriraj Kalluvila; editing by Diane Craft