Expedia Group (EXPE) Q4 Earnings & Revenues Beat Estimates
Zacks Investment Research | Feb 07, 2019 09:12PM ET
Expedia Group, Inc. (NASDAQ:EXPE) delivered fourth-quarter 2018 adjusted earnings of $1.24 per share, surpassing the Zacks Consensus Estimate of $1.07. The figure also surged 49% on a year-over-year basis but declined 66% sequentially.
Revenues increased 10.3% year over year but declined 21.9% on a sequential basis to $2.56 billion. Notably, the figure outpaced the Zacks Consensus Estimate of $2.55 billion.
Year–over-year top-line growth was driven by robust performance of HomeAway, Brand Expedia and Expedia Partner Solutions. Further, growing stayed nights and expanding lodging portfolio continued to accelerate revenue generation.
Expedia recorded gross bookings of $21.96 billion in the fourth quarter, which came ahead of the Zacks Consensus Estimate of $21.73 billion. Moreover, the figure improved 11.1% year over year but declined 11.3% sequentially.
We note that shares of Expedia rose by 7.9% in the after-hours trading on Thursday. This can primarily be attributed to better-than-expected results.
Additionally, shares of Expedia have returned 23% over a year against the Expedia Group, Inc. Quote
Operating Details
Adjusted EBITDA improved massively 17.2% year over year to $471 million. This can be attributed to rise in Egencia and Core OTA EBITDA which exhibited year-over-year growth of 65% and 9%, respectively.
Moreover, adjusted selling and marketing expenses were $1.2 billion, up 7% year over year.
Consequently, operating margin came in at 3.7%, contracting120 basis points (bps) from the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2018, cash and cash equivalents were $2.44 billion compared with $2.92 billion as of Sep 30, 2018. Short-term investments totaled $28 million, decreasing from $458 million in the previous quarter.
Further, Expedia’s free cash flow in the reported quarter was negative of $389 million which came down from the negative of $594 million in the third quarter.
Additionally, the company paid quarterly dividend worth $48 million (32 cents per share) during the reported quarter.
Guidance For 2019
Expedia expects adjusted EBITDA to witness growth within the range of 10-15% in 2019.
Zacks Rank & Stocks to Consider
Expedia carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are TripAdvisor (NASDAQ:TRIP) , Wayfair (NYSE:W) and Groupon (NASDAQ:GRPN) . While TripAdvisorsports a Zacks Rank #1 (Strong Buy), Wayfair and Groupon carry a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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