Shares of Expedia Group Inc. sank after hours on Thursday after the online travel-booking platform reported fourth-quarter results that missed expectations, as solid demand ran into rough weather – although management said trends has improved since.
The online travel-booking platform reported fourth-quarter net income of $175 million, or $1.11 a share, compared with $395 million, or $1.70 a share, in the same quarter last year. Revenue rose 15% to $2.62 billion, compared to $2.28 billion in the year-ago quarter.
On a customized basis, Expedia
EXP
earned $1.26 a share, compared to $1.06 last year.
Gross bookings were $20.51 billion, up 17% from the same quarter last year.
Analysts polled by FactSet expected Expedia to report adjusted earnings per share of $1.71, on revenue of $2.69 billion. They expect gross bookings of $20.96 billion.
For the first quarter, analysts expected Expedia to earn 22 cents per share, on sales of $2.66 billion. For the full year, they expect earnings per share of $9.43, on revenue of $12.74 billion.
“While our Q4 results were negatively impacted by the severe weather, demand is strong and fast, and has been stronger since the start of the year,” Chief Executive Peter Kern said in a statement.
He added that Expedia started the year with “record app usage and member numbers, led by Expedia US”
Shares fell 7.4% after hours.
Expedia reported after an epic post-lockdown rebound in travel demand ran into higher prices, concerns about the economy and Southwest Airlines Co.’s outdated, overburdened scheduling technology.
LUV
which led to thousands of flight cancellations in December. Against that backdrop, Wall Street is trying to gauge how much momentum is left in last year’s travel.
Some analysts are more concerned about the state of travel demand. In recent months, Citigroup analysts have downgraded hotel chain Hilton Worldwide Holdings Inc.
HLT
and Marriott International Inc.
MAR
,
while Wolfe Research downgraded Expedia and other travel booking sites.
However, Oppenheimer analysts upgraded Expedia last month, saying online travel booking trends “remain strong with strong demand and a strong consumer base.” And they say they like Expedia’s efforts to cut costs and improve customer service, as well as moves to integrate Expedia’s other brands into a loyalty program.
Brands include Orbitz, Travelocity, Hotels.com and Vrbo, which allow people to rent out their homes to travelers. Oppenheimer analysts said growth may slow at Vrbo, as travelers continue to pre-pandemic habits, after COVID-19 boosted demand for alternative accommodations.
Shares of Expedia have fallen 40.3% over the past 12 months. In comparison, the S&P 500 Index
SPX
fell by 11.1% during that period.
