Photographer: David Williams/Bloomberg

Expedia Sinks as Summer of Hurricanes Eats Into Profitability

  • Earnings miss analyst estimates; advertising costs climb again
  • Total revenue was $2.97 billion in the third quarter

Expedia Inc. dropped almost 8 percent in post-market trading after the online travel agent said quarterly results were buffeted by hurricanes over the key summer season.

Bellevue, Washington-based Expedia posted profit excluding certain costs of $2.51 a share, missing analysts’ average forecast of $2.62 a share. Revenue was $2.97 billion in the quarter, compared with the average estimate of $2.98 billion.

The travel industry relies on the busy summer season for its biggest infusion of revenue every year. The company said “recent natural disasters” dented the quarter’s profit by between $15 million and $20 million. The U.S., which is Expedia’s most important market, saw a series of devastating hurricanes strike during August and September, hitting the Gulf Coast, Caribbean, Florida and Puerto Rico.

Cost of revenue also increased 10 percent from the same period last year, showing Expedia had to spend more on advertising and technology to lure travelers to its websites. Priceline Group Ltd.’s is pushing into the U.S., taking on Expedia on its home turf.

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