Expedia Beats Estimates as Acquisitions Add to Revenue

  • HomeAway's traveler fees kicked in ahead of schedule
  • Expedia bought back $312 million in stock during the quarter

Expedia Inc. topped profit estimates as revenue from its recently acquired home rental business HomeAway Inc. kicked in ahead of expectations and strengthening foreign currencies mitigated the effects of the high U.S. dollar.

Profit, excluding some costs, was 9 cents a share in the first quarter, the Bellevue, Washington-based company said Thursday in a statement, compared with the average analyst estimate of a loss of 6 cents. Sales increased 38 percent to $1.90 billion, compared with the average estimate of $1.84 billion, according to data compiled by Bloomberg.

Expedia is working to expand revenue after spending more than $6 billion last year to buy HomeAway and rival Orbitz Inc. HomeAway started charging travelers a fee ahead of schedule and the impact of the extra cost hasn’t had a material effect on bookings, Chief Financial Officer Mark Okerstrom said in a phone interview.

“No negative implications on the business so far and really things are tracking very, very nicely,” Okerstrom said. HomeAway contributed $142 million in revenue during the quarter.

The shares gained as much as 10 percent Friday morning in New York, the biggest intraday jump in two months. They were trading at $115.00, up 7.5 percent, at 9:49 a.m. The stock declined 14 percent this year through Thursday. Expedia said it bought back $312 million of its shares during the quarter.

Expedia generated 41 percent of its revenue overseas in the quarter. The value of the dollar declined 4.1 percent versus 10 leading currencies during the period, lessening the effects on the company’s earnings.

The company increased spending 44 percent to $1.9 billion from the same period a year earlier, building out new data centers, almost doubling its marketing budget and hiring new employees to work on technology projects.

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