Summary
Expedia Group, Inc. (EXPE) reported its third-quarter and nine-month results for the period ending September 30, 2009. For the third quarter, revenue increased by 2% to $852.4 million, driven by a 26% increase in transactions in the Leisure segment, primarily in hotels and car rentals. However, revenue per room night declined significantly due to lower average daily rates (ADRs) and reduced traveler fees. For the nine months, revenue saw a 3% decrease to $2.26 billion, impacted by lower air and hotel revenue, though offset by increases in car rental and advertising/media revenue. The company noted a significant increase in operating income for the quarter, largely due to expense management and revenue growth, but the nine-month operating income declined, primarily due to substantial charges related to occupancy tax assessments and a class-action lawsuit settlement. Financially, Expedia ended the period with a stronger cash position, a substantial increase in cash and cash equivalents year-over-year. The company also reported a working capital deficit, which widened due to significant repayment of its credit facility. Despite the challenges posed by the ongoing economic downturn and specific industry pressures, Expedia is strategically focusing on brand portfolio, technology innovation, global reach, and product offering diversification.
Financial Highlights
30 data points| Revenue | $852.43M |
| Cost of Revenue | $169.44M |
| Gross Profit | $682.99M |
| Operating Income | $222.97M |
| Interest Expense | $21.18M |
| Net Income | $117.01M |
| EPS (Basic) | $0.82 |
| EPS (Diluted) | $0.80 |
| Shares Outstanding (Basic) | 144.21M |
| Shares Outstanding (Diluted) | 146.86M |
Key Highlights
- 1Third-quarter revenue increased 2% year-over-year to $852.4 million, driven by a 26% increase in Leisure segment transactions, though offset by lower pricing.
- 2Nine-month revenue decreased 3% to $2.26 billion, impacted by lower air and hotel revenue but bolstered by car rental and advertising/media growth.
- 3Operating income for the third quarter increased 12% to $223 million, benefiting from revenue growth and reduced operating expenses.
- 4Nine-month operating income decreased 6% to $431 million, primarily due to significant charges for occupancy tax assessments and a class-action lawsuit settlement.
- 5Cash and cash equivalents significantly increased to $838.6 million as of September 30, 2009, from $665.4 million at the end of 2008.
- 6The company is actively managing its debt, with $650 million repaid under its credit facility during the first nine months of 2009, leaving no outstanding balance at quarter-end.
- 7Expedia has recognized substantial legal reserves and accruals for occupancy tax issues and a class-action lawsuit, totaling significant amounts impacting the nine-month results.