Summary
Expedia Group, Inc.'s first quarter 2011 results show revenue growth of 15% year-over-year to $822.2 million, driven by a strong performance in the Leisure segment and increased advertising revenue from TripAdvisor Media Group. While operating income saw a slight decrease of 4% to $108.2 million, this was largely due to increased operating expenses outpacing revenue growth, particularly in selling and marketing. The company also reported a significant increase in net cash provided by operating activities, up 17.6% to $729.1 million, largely attributable to improved working capital benefits. A notable development during the quarter was the preliminary approval to spin off the TripAdvisor business into a separate publicly traded company, expected to be completed in the fall of 2011. This strategic move aims to unlock value for shareholders by creating two focused entities: one for travel transaction brands and another for travel media and advertising. Despite some challenges, such as a 10% decrease in air ticket volumes due to pricing and the temporary absence of American Airlines content, the company demonstrated resilience with healthy room night growth in its hotel business and a growing international presence. Expedia also continues to actively manage its capital through share repurchases and dividend payments.
Financial Highlights
56 data points| Revenue | $727.84M |
| Cost of Revenue | $175.61M |
| Gross Profit | $552.23M |
| Operating Income | $35.16M |
| Interest Expense | $22.52M |
| Net Income | $52.04M |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.37 |
| Shares Outstanding (Basic) | 136.93M |
| Shares Outstanding (Diluted) | 139.08M |
Key Highlights
- 1Total revenue increased 15% to $822.2 million for the three months ended March 31, 2011, compared to $717.9 million in the prior year period.
- 2Net income attributable to Expedia, Inc. was $52.0 million, or $0.19 per diluted share, a decrease from $59.4 million, or $0.20 per diluted share, in the prior year period.
- 3The company announced a preliminary plan to spin off its TripAdvisor business into a separate publicly traded company, expected to complete in Fall 2011.
- 4Net cash provided by operating activities increased significantly by 17.6% to $729.1 million, primarily due to enhanced working capital benefits.
- 5Selling and marketing expenses increased by 21% to $341.2 million, driven by higher online and offline marketing expenses and increased personnel costs, particularly at TripAdvisor Media Group.
- 6Hotel revenue grew 16% due to a 15% increase in room nights stayed, while air revenue saw a 6% increase driven by higher average ticket prices, despite a 10% decrease in ticket volumes.
- 7Cash and cash equivalents and short-term investments totaled $1.8 billion as of March 31, 2011, providing strong liquidity.