Kayak Turns in a Mixed First Earnings Report as Public Company

Kayak Software Corporation (NASDAQ: KYAK) has not exactly been immune to controversy, and its first public earnings report is going to keep the term ‘controversy’ alive in its shares.  The online travel company priced its IPO at $26, and that was above the $22 to $25 price indicated. Shares closed at $30.80 on Wednesday and its post-IPO range is $26.02 to $35.35.

The earnings report had shares down about 4% last night and this is going to sour the mood for investors if nothing changes.  While this is not a rule, there is generally an underlying expectation that fresh IPOs of hot companies are expected to beat their earnings estimates on their first public announcement.

Kayak’s second quarter earnings of $0.19 per share fell short of the $0.24 per share estimate from Thomson Reuters, while revenue was $76.9 million versus a consensus estimate of $75.2 million. What was so interesting is that shares were up by double-digit percentage gains ahead of the report as its shares gained over 11 percent in regular trading Wednesday.  There were 46,000 shares traded in the after-hours session and shares were down 4% at $29.55 last night.

The company did say that it is growing quickly and Bloomberg noted that the FactSet Research consensus was actually beat by one-cent per share. We will see how the opening bell treats this one, but we have some concern over what was a mixed earnings report for its first earnings report as a public company.

JON C. OGG