Revenue and hotel bookings rise, but charges send Expedia's 4Q profit down 90 per cent
BELLEVUE, Wash. - Soaring hotel bookings pushed revenue higher at Expedia Inc., but the online travel agency's fourth-quarter profit fell 90 per cent because of money it set aside to appeal a tax dispute in Hawaii.
Nights booked for hotel stays jumped 33 per cent as demand grew for a second straight quarter in Europe, Asia and the Americas. Room nights rose 19 per cent in the U.S., the best gain in two years. The average room rate fell 3 per cent.
Investors seemed to focus less on the bottom line and more on the strong hotel sales and surprising 24 per cent jump in revenue. Expedia shares rose in after-hours trading, adding to gains during the regular session.
Expedia said that it earned $6.7 million, or 5 cents per share, down from $70.3 million, or 44 cents per share, in the fourth quarter of 2011.
The results included $111 million that Expedia expects to pay to appeal a ruling on the way that hotel-occupancy taxes are calculated in Hawaii. Expedia could get back some or all of the money if it wins on appeal.
The company said that without the tax issue and other one-items, it would have earned 63 cents per share. Analysts surveyed by FactSet were expecting 65 cents per share.
Revenue rose to $974.9 million from $787.1 million, easily beating the $933.1 million forecast of analysts.
Expedia sold 12 per cent more airline tickets than a year before, with the average fare 2 per cent higher than a year earlier.
Expedia's shares rose $2.34, or 3.6 per cent, to $67.50 in regular trading, and were up another $3.15, or 4.7 per cent, to $70.65, in extended trading after the report.