Expedia Hits Record After Profit, Sales Beat Estimates

Updated on

Expedia Inc. shares rose to a record value since the company’s July 2005 spinoff from IAC/InterActive Corp. after second-quarter sales and profit topped analysts’ estimates.

Shares of the travel services website jumped 13 percent to $121.44 at the close in New York, their highest closing price since becoming an independent company a decade ago, according to data compiled by Bloomberg.

“This is a reflection of some solid fundamentals in the business,” said Justin Patterson, an analyst at Raymond James Financial Inc. in San Francisco.

Patterson said the jump also may reflect increased confidence that the company’s purchase of Orbitz Worldwide Inc. will close without any issues. The Bellevue, Washington-based company said in February that it was buying Orbitz for $1.6 billion including net debt and expected the acquisition to close in the second half of this year. There had been concern the deal might be blocked, but Patterson said recent reports suggest the U.S. Department of Justice will allow it to proceed.

Expedia on Thursday reported profit, excluding certain items, of 89 cents a share, compared with the 85-cent average analyst estimate. Revenue increased 11 percent to $1.66 billion, beating the $1.65 billion average of analysts’ estimates compiled by Bloomberg.

In May, Expedia sold its stake in ELong Inc., a Chinese online travel company.

The company’s advertising and media business, excluding ELong, increased 27 percent on a 12-month basis, Expedia said in a statement. Excluding the Chinese company, gross bookings increased 20 percent and room night growth gained 35 percent.

a

Play Episode

Before it's here, it's on the Bloomberg Terminal. LEARN MORE