(Reuters) - Expedia Inc (EXPE.O) reported robust third-quarter earnings on Thursday and topped analyst estimates, as strong hotel bookings boosted the company’s profit by more than 50 percent from the year-earlier quarter.
The world’s largest online travel company by bookings posted net income of $257.1 million and earned $1.94 per diluted share, well ahead of Wall Street’s average estimate of $1.74, according to Thomson Reuters I/B/E/S.
Despite heavy competition abroad and concern that the Ebola virus would discourage travelers from planning vacations, the volume of Expedia Inc’s bookings grew by 29 percent to nearly $13.5 billion in the quarter. Revenue from hotel bookings, which accounts for 73 percent of Expedia’s business, jumped by 21 percent to buoy these results.
“These results were pretty encouraging,” said S&P Capital IQ analyst Tuna Amobi, noting that the company reaffirmed its guidance for the year. “The Travelocity integration, which they completed sometime last year, has really proven to be a major catalyst to both their hotel and air ticket bookings.”
Expedia Inc boasts Hotels.com and the recently acquired trivago among its brands. It also launched a marketing agreement with Sabre Corp’s SABR.O Travelocity at the end of 2013.
While the volume of Expedia’s bookings is more than 3.5 times that of its largest competitor Priceline Group Inc (PCLN.O) in the U.S., according to research by Morningstar, Expedia has grown more slowly than Priceline abroad.
Amobi said a “slowdown in some international markets” was the only negative factor in Expedia’s third-quarter performance, along with some pricing pressure from competitors.
Expedia’s Chief Executive Officer Dara Khosrowshahi said during the company’s earnings call Thursday that additional investment would lead to losses at its China-focused site eLong during the current quarter and into 2015.
“The market in China continues to be very dynamic and fiercely competitive, with a number of players making significant and increasing investments,” he said.
Expedia’s revenue grew 22 percent to more than $1.71 billion, beating Wall Street’s average expectation of less than $1.68 billion. Revenue from advertising and media contributed heavily to the increase.
The company’s shares were up 1.9 percent at $82.30 in after-hours trading in New York.
Reporting By Jeffrey Dastin; Editing by Steve Orlofsky and Cynthia Osterman