Travel bookings and overall integration efforts following Expedia Inc.'s acquisitions of Orbitz Worldwide and HomeAway have gone better than expected, enabling the company to beat analysts' estimates of first-quarter results, executives said during a conference call with analysts Thursday.
Expedia reported a $121.9 million loss for the quarter, compared with net income of $44.1 million a year earlier, when it took $105 in one-time gains. Still, revenue rose 42% in the quarter (14% without the company acquisitions), to $1.9 billion, as gross bookings surged 32% (10% without the acquisitions). Profit, excluding certain one-time items, was $13.5 million.
As a result, Expedia beat analysts' profit and revenue estimates, and shares were up more than 12% in after-hours trading on Thursday.
"The Orbitz integration is going well," Expedia CEO Dara Khosrowshahi said during Thursday's call. "We're particularly pleased with hotel conversion and room-night production."
Financial chief Mark Okerstrom, who last year estimated that the company would cut Expedia and Orbitz's annual combined costs by $75 million because of efficiencies stemming from the acquisition, said Thursday that there was "sufficient upside" to that figure.
Khosrowshahi said that hotel companies' recent efforts to persuade guests to book direct have had little impact on its room bookings; Expedia was "not seeing a significant impact on our volume," he said.
"The partners who play well with us will gain share in the marketplace," he added.
As for HomeAway, "all signs point to that inventory producing very well," Khosrowshahi.
HomeAway said separately Thursday that it would shrink its number of annual subscription levels to two from five. Starting July 11, subscribers will be charged as little as $349 a year, while the pay-per-booking fee will be cut to 8% from 10%.