Expedia jumps after forecasting double-digit profit growth

| |

(Bloomberg) – Expedia Group Inc. announced a profit forecast for 2020 for “double-digit” growth that exceeded analysts’ estimates, pointing out that the company can maintain bookings given the slowdown in global travel demand caused by the spreading corona virus. The shares gained more than 11% in expanded trading.

The online travel giant reported that fourth-quarter revenue increased 7.3% to $ 2.75 billion, missing only the $ 2.77 billion forecast by analysts. Gross bookings increased 5.9% to $ 23.2 billion in the period ended December 31, the Seattle-based company said in a statement on Thursday.

Adjusted earnings before interest, taxes, depreciation and amortization was $ 478 million and, according to Bloomberg, exceeded analysts’ average estimate of $ 451.6 million.

“Given the uncertainty surrounding how much cost savings we will achieve this year and the full impact of coronavirus, we do not offer a specific benchmark,” said chairman Barry Diller and vice chairman Peter Kern in the statement. “However, taking these factors into account, we expect double-digit growth in adjusted EBITDA for 2020.”

The couple said they were aiming for $ 300-500 million in “savings on running costs in our company.”

The recent outbreak of the corona virus, known as Covid-19, which has its origins in China and has spread to more than 20 countries, has hit hotel companies from airlines to hotels to cruise companies as tourists cancel trips and close shops. The health crisis is one of several challenges for the company, as the two top executives were displaced after a conflict with the management board because of growth prospects.

In November, then CEO Mark Okerstrom lowered the 2019 earnings outlook after analysts’ estimates were lacking in the third quarter. Expedia largely blamed Google for cramming the top of its search results with more advertising, pushing down free travel deals, and forcing them to spend more on marketing. Okerstrom and CFO Alan Pickerill resigned in December, leaving the company in the hands of Diller and Kern.

Stocks rose to a high of $ 124.25 in extended trading after closing at $ 110.59 in New York. The stock has fallen 13% in the past 12 months.

Expedia has been pressured by Airbnb Inc. and Booking Holdings Inc. to rent vacation homes – the fastest growing sector of the travel market. Last year, the company redesigned its short-term rental unit Vrbo to try to catch up with its competitors. Vrbo saw sales grow 13% to $ 259 million in the fourth quarter. The unit generates approximately 10% of Expedia’s total revenue. However, analysts and investors are focusing on Vrbo as this is the best growth opportunity for the company.

Fourth quarter net income increased to $ 76 million. Excluding certain items, earnings per share were $ 1.24, exceeding the average analyst estimate of $ 1.14.

(Updates to Vrbo earnings in the ninth paragraph.)

To contact the reporter about this story: Olivia Carville in New York at [email protected]

To contact the editors responsible for this story: Molly Schuetz at [email protected], Andrew Pollack, Alistair Barr

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For more articles like this please visit us at bloomberg.com“data-reactid =” 24 “> You can find more items of this kind at bloomberg.com

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Subscribe now “data-reactid =” 25 “> Subscribe now to stay ahead with the most trusted business news source.

© 2020 Bloomberg L.P.


“People have no taste” [Video]

The Italian Senate abolishes the defiant Salvini’s immunity to the migrant boat


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.