Expedia Q2 Profit Beats View, Hikes Dividend; Shares Rise

(RTTNews) - Online travel services company Expedia Inc. (EXPE) on Thursday reported a surge in profit for the second quarter from last year, reflecting double-digit revenue growth on growth in travel bookings and also helped by a one-time gain.

Adjusted earnings per share for the quarter beat analysts' expectations, while revenues matched their estimates. In addition, the company raised its quarterly dividend by 33 percent. Shares of the company gained more than 8 percent in extended trades.

Bellevue, Washington-based Expedia's second-quarter net income increased to $449.64 million or $3.38 per share from $89.37 million or $0.67 per share in the same period last year.

The latest quarter's results include a gain of $508.81 million on sale of a majority stake by Expedia in Chinese online travel company eLong, Inc. (LONG). In May, Expedia sold its 62.4 percent equity stake in eLong, Inc. for about $671 million to several purchasers including Ctrip.com International, Ltd. (CTRP).

Excluding special charges, adjusted earnings for the quarter were $118.6 million or $0.89 per share, compared to $137.6 million or $1.03 per share in the year-ago period.

On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.84 per share for the quarter. Analysts' estimates typically exclude special items.

Expedia's revenue for the quarter grew 11 percent to $1.66 billion from $1.49 billion last year. Analysts had a consensus revenue estimate of $1.66 billion for the quarter.

Revenue excluding eLong increased 15 percent year-over-year, driven primarily by the Core OTA business. This includes strong performance at Brand Expedia and Hotels.com, as well as at trivago.

Hotel revenue increased 14 percent in the quarter, driven by a 35 percent increase in room nights stayed, partly offset by a 16 percent decrease in revenue per room night. Domestic room nights increased 24 percent and international room nights grew 50 percent.

Air revenue increased 14 percent, reflecting a 26 percent increase in air tickets sold, partially offset by a 10 percent decrease in revenue per ticket.

Second-quarter gross bookings rose 19 percent from last year. Gross bookings excluding eLong increased 20 percent, driven by growth in the Core OTA business, including strong performance at Brand Expedia and Hotels.com.

Expedia's total room night growth declined to 25 percent from 28 percent in the year-ago period. However, room nights growth excluding eLong improved to 35 percent from 25 percent in the same period last year.

During the quarter, Expedia added nearly 27,000 properties to its global supply portfolio, which now stands at about 257,000 properties available on Expedia, Inc. sites.

Subsequent to quarter end, Expedia's board of directors approved a 33 percent increase in the cash dividend payable in September, raising the dividend to $0.24 per share of outstanding common stock.

EXPE closed Thursday's regular trading session at $107.61, up $0.74 or 0.69 percent on a volume of 4.19 million shares. In after-hours, the stock further gained $9.14 or 8.49 percent to $116.75.