Expedia Soars Most in Three Months on Quarterly Sales

(Corrects time frame of stock’s gain in headline, second paragraph.)

Expedia Inc. (EXPE), an online-travel company, rose the most in three months after reporting quarterly revenue that topped analysts’ estimates and boosting its dividend.

Expedia, based in Bellevue, Washington, advanced 20 percent to $54.92 at 2:31 p.m. in New York, after earlier climbing as much as 28 percent for the biggest percentage jump since April 27. They had gained 58 percent this year through yesterday.

The company saw stronger second-quarter demand for hotel rooms, Chief Executive Officer Dara Khosrowshahi said on a conference call yesterday. A 22 percent increase in room nights offset a 1 percent decline in the average daily rate. Expedia’s acquisition of VIA Travel in April has also boosted bookings revenue, Khosrowshahi said.

“We continue to believe the best is yet to come,” said Herman Leung, an analyst at Susquehanna Financial Group, in a note to investors today. He set a target price of as much as $60. “There is still room for further profit expansion, especially as we look out to 2013.”

Second-quarter sales rose 14 percent to $1.04 billion. That topped the average analyst estimate of $988.7 million, according to data compiled by Bloomberg.

Profit, excluding some items, increased 24 percent to $125 million, or 89 cents a share. The average analyst estimate was 72 cents, according to data compiled by Bloomberg.

Ebitda Forecast

Adjusted earnings before interest, taxes, depreciation and amortization for 2012, or Ebitda, may increase in the “high- single digits with the possibility of low double-digit growth,” Mark Okerstrom, Expedia’s chief financial officer, said on a conference call with analysts yesterday. The company, which reported adjusted Ebitda of $710.8 million in 2011, had previously forecast growth this year in the “mid-single digit” range.

Expedia said it will increase its quarterly dividend 44 percent to 13 cents a share, payable to stockholders of record on Aug. 28, with a payment date of Sept. 18.

“This is the second quarter in a row that management has delivered on improvements in global platform migration,” said Daniel Kurnos, an analyst at Benchmark Co. in Delray Beach, Florida, who has a “hold” rating on the stock. “Hotel room booking growth at this level should probably be sustainable.”

To contact the reporter on this story: Kathleen Chaykowski in New York at kchaykowski@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net