According to the news report by Bloomberg, Expedia Group Inc.’s shares went up have the online travel company forecast profits that beat analyst estimates.
During a conference call on Thursday, the Chief Financial Officer of Expedia Alan Pickerill reported that adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was expected to grow by between 10% and 15%. The market expectation was that EBITDA would increase by 9%.
Expedia’s stocks gained more than 7% on Thursday during after-hours trading. The company’s shares closed the regular trading day at $127.87 per share. Shares for the company are up by 14% for the year through to the end of trading day on Thursday.
Expedia also reported its fourth quarter results, which also beat analyst expectations.
Profit, after certain costs were excluded, came to $1.24 per share, which was higher than the market consensus estimates of $1.06 per share. Revenue was at $2.56 billion, up by 10%. Wall Street analysts had predicted that revenue would be at $2.54 billion.
MarketWatch gave some more details about the earnings. Expedia reported that it earned $17 million, which comes to $0.11 per share for the fourth quarter. In the fourth quarter of 2017 – the year ago period – the online travel agent reported earnings of $55 million, which was $0.35 per share.
However, Expedia’s home rental service showed a slow down in growth. For the fourth quarter of 2018, revenues of HomeAway grew by 20%. This is the slowest that revenue has grown for the year.
Gross bookings grew by 15% for HomeAway compared to the same time a year ago, when the metric grew by 47%. Expedia had spent $3.9 billion in 2015 to acquire HomeAway so that it could compete directly with Airbnb in the home rental space.
From the HomeAway platform, Expedia has about 370,000 home rental properties. With this figure being added to what the company already has on its own platform, the total number of lodging properties that the online travel agent has is now 1 million.
Gross bookings for the company were at $21.9 million and the market expectation was of $21.8 million. For the entire year, gross bookings were at $99.73 billion, which was a 13% growth over 2017.
The company ended last year with a free cash flow of $1.10 billion. The same time last year, the company reported a free cash flow of $1.14 billion.
According to the news report by GeekWire, Expedia’s earnings report comes at the same time as the start of a lawsuit that the company filed against United Airlines. Expedia is suing United because the travel agent alleges that the carrier has been locking it out of fare data due to a dispute in the contract between the two companies.
If this fight between the travel agent and the carrier continues, Expedia has stated in its lawsuit that it will not be able to list United Airlines flights on its platform from September 30, 2019 onwards. The company also mentioned in its lawsuit that its customers had already reserved more than 2,000 seats on United post September 30.
In its lawsuit, Expedia is accusing United of breach of contract for keep back data related to air fares.
This year, Expedia is also looking to move into its new Seattle headquarters. The new headquarters, situated on the waterfront, has room for 5,000 employees. This will give the company room to grow from its current headcount of 4,500 employees.
The company stated that the new campus has a biophilic design, which allows for a greater connection between nature and people, thereby increasing physical and mental wellness.