Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Expedia 3Q Profit Falls On Charges [Business Week/AP]
Summary: Online travel bookings portal Expedia.com reported decreased profits of 28% in its recent quarter, balanced by an increased revenues of 5%. The company's earning break down as follows: net earnings were $59 million, or $0.17 per share, compared with $82 million, or EPS of 23 cents a year earlier. Excluding one-time items including the elimination of interest income from its former parent company, IAC/InterActiveCorp., Expedia's income was $117.2 million, or $0.34 a share, compared with $126.9 million or 35 cents per share, a year earlier. Analysts polled by Thomson were expecting EPS of just 30 cents. Revenue rose 5% to $613.9 million from $584.7 million in the year-ago quarter. Analysts were expected slightly lower revenue of $612 million. Expedia cited weakening profits from air travel booking as the main factor in its lowered net earnings, as airlines squeezed profits from 3rd party booking agencies by offering less compensation per ticket. This was balanced out by a 14% worldwide increase in hotel revenue, which translated into 5% growth in revenue per room night for Expedia. Shares responded by gaining 2.5% yesterday, before giving up 1.71% in after hours activity.
Related links: Expedia Q3 2006 Earnings Call Transcript. Additional earnings coverage: Reuters • WSJ • Eye For Travel.com. Seeking Alpha commentary: Expedia's Stock Fall Means Debt Covenant May Be Violated • Expedia Comments on Revenues in Europe • Priceline: Strong Growth, But That Doesn't Look Sustainable • The End of Orbitz as a Public Company.
Potentially impacted stocks and ETFs: Expedia (NASDAQ:EXPE), IAC/InterActiveCorp. (IACI) • Competitors: Travelzoo (NASDAQ:TZOO), priceline.com (PCLN), eLong (NASDAQ:LONG), Ctrip.com (NASDAQ:CTRP).
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