BELLEVUE, Wash. – Expedia Inc. on Monday posted a quarterly operating profit of $15 million, beating its own bullish guidance as customers hunted for bargains at the online travel company amid a slowing economy.
Expedia said profits excluding non-cash charges, for its fourth fiscal quarter ended June 30, came in at $15 million, or 25 cents per share, compared with a loss of $13.1 million, or 30 cents a share, a year earlier.
Including charges stemming from stock options and acquisition costs, Expedia posted a net loss of $4.3 million, or 9 cents a share, sharply lower than the loss of $42 million, or 98 cents a share, a year earlier.
The Bellevue, Washington-based company was expected to earn a pro forma profit of between 7 and 27 cents a share, according to analyst estimates compiled by Thomson Financial/First Call. The consensus forecast was for 20 cents a share, in line with guidance Expedia issued earlier this month.
Revenues more than doubled to $78.5 million from $36.9 million a year earlier while gross bookings for the quarter rose 78 percent over a year earlier, hitting $802 million.
``People are shopping hard for great deals as their travel wallets tighten up,'' Chief Executive Richard Barton told Reuters in an interview. ``There is this tidal shift of people moving from traditional ways of booking to online booking.''
GUIDANCE IN LINE
Expedia also expected income before non-cash items of between $10 million and $12 million for its current quarter.
With outstanding shares expected to number 64 million at the end of the current quarter, according to Expedia, that works out to between 16 to 19 cents a share, at the high end of analysts' forecasts of between 7 and 19 cents.
Profits for the full fiscal 2002 year would top $50 million, the company said. With 66 million shares expected to be outstanding by then, that implies per-share earnings of 76 cents for the year.
Although Expedia shares lost $1.85, or 3.7 percent, in Nasdaq trading on Monday, the shares gained that back in after-hours trading, rising to $50 after the results were announced.
One of the few dot-com companies to emerge from the sector's collapse in strong financial shape, Expedia has seen its share price triple in the past six months as it consistently beats expectations.
Another Web travel service, Travelocity.com Inc., has risen about 30 percent in that period while the tech-laden Nasdaq index has fallen 30 percent.
MERCHANT BIZ STRONG
Expedia was set up by software giant Microsoft Corp., which is selling its remaining 70 percent stake to media company USA Networks Inc.
Strength came largely from its merchant business, in which it sells customized travel packages. That segment grew to $26 million, up 176 percent from $9.3 million a year earlier.
Merchant revenues were seen roughly doubling in the fiscal 2002 year, Chief Financial Officer Gregory Stanger told analysts on a conference call.
Expedia's main agency business, in which it collects fees on sales of airline tickets, more than doubled to $43.9 million from a year earlier, it said.
Agency revenues would grow 50 to 60 percent in the year, Stanger said.
Remaining revenue comes from licensing and advertising, which are suffering amid an ad market slump. That segment rose to $8.7 million, up 30 percent from a year earlier but down 9 percent from the third quarter.
Ad revenues would fall 25 to 30 percent in the year, Stanger said, remarking that: ``The environment for Internet advertising is still very challenging.''