Expedia profit misses as severe weather weighs on holiday quarter
Reuters
Published Feb 09, 2023 04:20PM ET
Updated Feb 09, 2023 05:51PM ET
By Doyinsola Oladipo and Shivansh Tiwary
(Reuters) -Online travel booking company Expedia (NASDAQ:EXPE) Group Inc missed Wall Street estimates for fourth-quarter profit on Thursday, hit by a spike in cancellations and bad weather near the end of the quarter.
Travel demand has generally been strong throughout last year despite recession and inflation fears. However, harsh December winter snarled airport operations around the United States, hurting travel booking companies.
The company posted revenue of $2.62 billion, missing Wall Street estimates of $2.7 billion. Shares fell as much as 8% after the closing bell, but pared those losses to trade 1.5% lower.
Chief Executive Peter Kern said "political issues" and "unique rules" are contributing to the ongoing challenges in the revival of China outbound travel, including the ability for airlines to fly direct in and out of China, as well as access to Russia airspace.
"It's going to take a little while to work itself out, but interest is very high," he added.
The company's quarterly adjusted profit was $1.26 per share, short of analysts' expectations of $1.67 per share, according to Refinitiv data.
Total gross bookings across travel products rose 17% from the year-earlier period to $20.5 billion.
"We are pleased to see strong lodging demand continue, including total lodging bookings for stays expected to occur in the first half of 2023, continuing to meaningfully outpace 2019 and 2022 levels," Expedia Chief Financial Officer Julie Whalen told investors on a call.
The company said it has seen an increase in direct costs related to partner commissions and increased marketing spends in retail channels.
Morningstar Inc senior analyst Dan Wasiolek said investors are watching Expedia's return on investment (ROI) on marketing as the company worked over the past few years to unify their technology platform and attract long-term customers.
"They said last quarter that they're seeing evidence that they're getting better marketing ROI-wise, but it's not coming through in the numbers for us," he added.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.