Expedia profit jumps 51 percent in 1st quarter on travel rebound, more advertising revenue

By Sarah Skidmore, AP
Thursday, April 29, 2010

Expedia 1Q profit jumps 51 pct on travel rebound

PORTLAND, Ore. — Expedia Inc. said increased revenue from advertising and a rebounding travel industry helped boost its profit 51 percent in the first quarter.

Expedia, based in Bellevue, Wash., reported after the market closed Thursday that it earned $59.4 million, or 20 cents per share, for the quarter. That’s up from $39.4 million, or 14 cents per share, in the same quarter last year.

Adjusted for one-time items in both quarters, the company earned 26 cents per share — beating analyst expectations of 22 cents per share, according to Thomson Reuters.

Expedia’s revenue grew 13 percent to $718 million, falling short of analyst’s $722.4 million expectations.

The company — which operates travel sites such as Hotwire.com, Hotels.com, Tripadvisor and its namesake site — said revenue from advertising jumped 34 percent and transactions rose 18 percent during the quarter. The company also benefited from a lower tax rate during the quarter.

Expedia, which saw a sharp pullback in travel during the recession, said travel is beginning to return to normal.

The company saw significant growth in its international business, particularly in hotel bookings. International revenue grew 31 percent, or 24 percent excluding foreign exchange impact. Meanwhile, domestic revenue grew only 5 percent due to lower gross bookings.

Looking forward, the company said Iceland’s volcano will affect the the second quarter. The company saw a number of cancellations and a slowdown in European bookings during the two weeks after the eruption.

Expedia expects roughly flat operating income before amortization in the second quarter because of the impact of the volcano.

Shares of Expedia rose 99 cents, or 4 percent, to $25.60 in after-hours trading.

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