Expedia Profit Down, But Tops View; Shares Surge 18%

(RTTNews) - Expedia Inc. (EXPE) on Wednesday reported a decline in profit for third-quarter, hurt largely by increased expenses and higher income tax provisions. Earnings for the quarter trounced Wall Street estimates, as revenues grew 17 percent on higher bookings. Shares of the online travel company surged 18 percent in the after-hours, following the news.

Bellevue, Washington-based Expedia's third-quarter profit dropped to $170.9 million from $171.5 million a year ago. On a per share basis, earnings rose to $1.22 per share from $1.20 per share last year, due to lower number of shares outstanding.

Income tax provision for the quarter rose to $45.4 million from $36.2 million a year ago.

Adjusted earnings improved to $1.43 per share from $1.32 per share last year. On average, 26 analysts polled by Thomson Reuters expected earnings of $1.35 per share. Analysts' estimates typically exclude special items.

Revenue for the third quarter rose 17 percent to $1.40 billion from $1.20 billion a year ago, while 23 analysts had consensus revenue estimate of $1.37 billion for the quarter.

The revenue growth was linked to increases in hotel room nights stayed as well as advertising and media revenues.

Third-quarter gross bookings increased 15 percent from last year, aided mainly by a 20 percent growth in hotel room nights and 7 percent increase in air tickets. Domestic bookings increased 13 percent, while international bookings jumped 18 percent.

Average daily room rates were essentially flat year-over-year, while average airfares rose 3 percent.

Sales and marketing expenses increased 24 percent, while technology and content costs rose 14 percent. General and administrative expenses increased 9 percent.

EXPE closed Wednesday at $49.96, down $0.72 or 1.42%, on the Nasdaq. The stock, however, surged $9.09 or 18.19% in after hours trade.