Expedia Reports Lower Quarterly Revenue
Online travel agency Expedia on Thursday reported higher revenue but lower profit, hurt by rising costs that sent its shares down 5 percent in after-hours trading.
The company said its Expedia brand under-performed in the quarter as a rise in airfares resulted in fewer airline tickets being sold.
"The revenue outlook is not extremely promising and there are a lot of uncertainties involved," said Morningstar analyst Dan Su. She said revenue growth in 2011 slowed from 2010 and added that certain margins contracted.
Expedia, whose brands include Hotwire and Hotels.com, has been investing heavily in technology and international expansion to position the business for growth.
Daniel Kurnos, an analyst with Benchmark, said certain costs rose more than expected in the quarter, hurting growth. Selling and marketing expenses rose 11 percent in the quarter and technology and content costs grew 29 percent, excluding stock-based compensation, for example.
Fourth-quarter net income from continuing operations was USD$59.7 million, compared with USD$63.4 million a year ago.
Quarterly revenue rose 7 percent to USD$787.1 million.
Worldwide air revenue fell 19 percent in the period as airline tickets sold were down 8 percent. Worldwide hotel revenue was up 12 percent.