Expedia stock plunges 19 percent on fourth quarter profit misses

Earnings


U.S. online travel services company Expedia missed analysts’ quarterly profit estimate on higher marketing expenses, sending its shares tumbling 19 percent in after-hours trading on Thursday.

And discouraging remarks from Chief Executive Officer Mark Okerstrom likely didn’t help the tumble.

The year “did not end up as we had planned from a financial perspective,” Okerstrom said during a conference call with investors.

The company, whose brands include Expedia.com, Hotels.com, Hotwire, said selling and marketing costs jumped 16 percent to $1.12 billion in the fourth quarter.

“We are now operating with a clear focus on our highest priority markets, making concentrated investments across the platform …,” Okerstrom said in a statement.

This is the first full quarter under Okerstrom, who succeeded Dara Khosrowshahi after he left to take the top job at car-ride provider Uber Technologies.

Expedia’s HomeAway vacation rental business, a rival to Airbnb, reported a 16 percent jump in revenue to $193 million in the fourth quarter, compared with analysts’ average estimate of $225.4 million, according to Thomson Reuters I/B/E/S.

On an adjusted basis, Expedia earned 84 cents per share in the quarter, falling well short of analysts’ average estimate of $1.15, according to Thomson Reuters.

Bellevue, Washington-based Expedia said gross bookings rose 13.6 percent to $19.8 billion.

Net income attributable to Expedia declined to $55.2 million, or 35 cents per share, from $79.5 million, or 51 cents per share, a year earlier. (http://bit.ly/2EcS9rE)

The company’s revenue rose to $2.32 billion in the three months ended Dec. 31, from $2.09 billion.

Trivago GmbH, majority owned by Expedia, reported a bigger-than-expected fourth-quarter loss on Wednesday as the hotel search platform spent more on sales and marketing.

–CNBC’s Chloe Aiello contributed to this report.



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