Expedia Inc. (NASDAQ: EXPE)
Expedia, the world’s largest online travel service, posted a second quarter profit above analysts expectations and announced a larger dividend as travel bookings grew. Sending its shares up 8% from yesterday’s close price. Reuters
EXPE Earnings & Outlook
Expedia shares rose in Thursday’s after-hours trading by 7.14% to $114.50 after their second quarter numbers were reported. The travel company reported earnings of .89 cents per share on the revenue of $1.66 billion, exceeding initial projections of .85 cents per share on revenue of $1.66 billion. The company also announced plans to acquire rival travel company Orbitz.com. Given the positive numbers of the quarterly phone call and the news that Expedia is acquiring additional travel companies, along with additional hotels all over the globe, we’d say Expedia is a hot stock to watch.
Expedia CEO’s Comments
According to The Street, Expedia President and CEO, Dara Khosrowshahi, had the following to say on the Expedia Q2 conference call:
“Second quarter was another solid quarter for Expedia . We once again saw healthy unit trends across products with global room nights up 35%, air tickets up 26% and car rental days up 35% year on year. We were pleased with revenue growth of 15% and adjusted EBITDA growth of 12% for the quarter. Our core OTA segment continued to perform well led by strong top-line growth for brand Expedia and hotels.com, our two biggest businesses. We also saw healthy revenue growth from Travelocity and EAN along with an inorganic tailwind from Wotif and our Air Asia/Expedia joint venture which we now consolidate as a result of increasing our ownership stake to 75%.
This is a significant milestone as we now have added more properties in the first half of 2015 than we did in all of 2014. We have got a very long runway here and we expect to spend the next several years building out our global lodging inventory.Based on our experience thus far we believe that these two platforms represent unique competitive assets which can be leveraged to draw further top- and bottom-line growth going forward. In closing, I would like to thank our teams around the world for all of their efforts and, in doing so, celebrate for a moment a very good first half of the year. We must remain focused on driving strong execution and great innovation. There is still a lot of work ahead of us and competition remains as fierce as ever.”
Technical Analysis
EXPE gapped up today in price to $116 up from yesterday’s close of $107.61 which is an 8% increase based on positive earnings news. Taking a look at the chart we can see the stock is trading at yearly highs. The previous high was $115 back on May 22 of this year. Since the stock gapped above the 52 week high we will be looking for the $115 price to be our new support level for this stock now. For trading purposes, we will be using the pre-market highs of 117.45 as an entry point or an add on price for more. An exit price would be $115 if it falls below that level I fear that it can close the gap up in price. The stop loss price range is more than I usually prefer, but due to the stock price and its volatility it is an acceptable range and scaling size in a position accordingly is necessary.
Company Profile
Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. The company operates in two segments, Leisure and Egencia. It provides travel products and services to leisure and corporate travelers, offline retail travel agents, and travel service providers through a portfolio of brands, including Expedia.com, Hotels.com, Hotwire.com, Classic Vacations, Travelocity, Expedia Local Expert, Egencia, Expedia CruiseShipCenters, eLong, and Venere.com, as well as trivago, CarRentals.com, Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct, LateStays.com, GoDo.com.au, and Arnold Travel Technology. It facilitates the booking of hotel rooms, airline seats, car rentals, and destination services from its travel suppliers, as well as acts as an agent in the transaction, passing reservations booked by its travelers to the relevant travel providers. The company was founded in 1996 and is headquartered in Bellevue, Washington. Yahoo Finance
