Expedia shares up 30 percent on profits exceeding estimates

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Expedia is the latest company reporting profits higher than Wall Street expectations, on decreased earnings,  to see its stock price soar. On Thursday, after surprising investors with better-than-expected profits, shares in the company soared by 28 per cent.

The online travel company revealed that its adjusted income was 21 cents per share, which was significantly better than the 17 cents per share that analysts had expected. With restructuring charges included, Expedia’s earnings for the first quarter were $39.4 million, or 14 cents per share, which was a decline of 23 per cent from the $51.3 million – or 17 cents per share – reported one year earlier.

Revenue for the first quarter totaled $635.7 million, which was eight per cent less than the $687.8 million reported for the first quarter of 2008, but surpassed the $588 million targeted by analysts.

The company attributed the decline in the top line to decreased leisure bookings during the three-month period, as consumers continued to cut back on vacation travel. Part of the decrease was offset by an increase in rental car bookings and advertising revenue, the Internet travel company said.

The company’s revenue derived from air travel decreased by 17 per cent for the quarter, as compared with the same period last year; and ticket volumes declined by four per cent.

In March, Expedia instigated a price war in the industry when it announced that it was waiving booking fees for airline tickets through 31 May.

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