Services

Expedia's Q4 Is a Big Hit, but What Comes Next?

Chris Lange

Published: February 14, 2020 9:45 am

When Expedia Inc. (NASDAQ: EXPE) released its most recent quarterly report late on Thursday, the travel booking company said that it had $1.24 in earnings per share (EPS) on $2.75 billion in revenue. Consensus estimates had called for $1.18 in EPS on revenue of $2.77 billion. The fourth quarter of last year reportedly had EPS of $1.24 and $2.56 billion in revenue.

During the latest quarter, revenue increased 7% year over year. At the same time, gross bookings increased 6%, or $1.3 billion, to $23.2 billion.

Room nights stayed for Brand Expedia, Hotels.com, Expedia Affiliate Network and Egencia combined increased 11% year over year.

The company did not directly issue guidance of the first quarter, but the consensus estimates from Thomson Reuters call for a net loss of $0.30 in EPS on $2.81 billion in revenue.

Chair Barry Diller and Vice Chair Peter Kern commented:

Since our management change in December we have re-focused the company on our core operations which had suffered for much of 2019. We have rapidly moved to simplify how we operate and increase efficiency. These changes helped us exceed the high-end of our revised guidance range in 2019 and will contribute to accelerated profit growth in our underlying business in 2020. In addition, we are targeting $300-500 million of run-rate cost savings across our business. We are not providing a specific guidance range given uncertainty on how much cost savings we’ll recognize this year and the full effect of Coronavirus. However, taking these factors into account, we expect 2020 Adjusted EBITDA growth to be in the double-digits. More importantly, the actions we’re taking to simplify our business and drive cost efficiency will position Expedia Group for improved revenue growth and margin expansion for years to come.

Expedia stock traded up more than 11% on Friday to $123.22, with a consensus price target of $128.54 and a 52-week trading range of $93.53 to $144.00.

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