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Expedia Reported Narrower Q1 Loss, Missed on Revenues


May. 3 2019, Published 9:21 a.m. ET

Mixed results

Expedia (EXPE) reported mixed first-quarter results after the markets closed on May 2. The company’s bottom line was better than analysts’ estimate, while the top line fell short of analysts’ estimate. The company marked a YoY (year-over-year) bottom-line and top-line improvement.

For the first quarter, the company reported an adjusted loss of $0.27 per share, which was much lower than analysts’ expectation of a loss of $0.38 per share. The quarterly adjusted loss per share was also narrower than the loss of $0.46 reported in the first quarter of 2018.

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Expedia’s first-quarter revenues rose 4% YoY to $2.61 billion due to the strong performances in its Core OTA, VRBO (Vacation Rentals by Owner), and Egencia segments. The enhanced lodging portfolio and increased nights stayed also added to the company’s top-line results. The YoY growth was partially offset by the weak performance in Expedia’s Trivago (TRVG) subsidiary. Expedia’s total revenues were slightly below analysts’ forecast of $2.69 billion.

Expedia’s dismal quarterly results reflect the seasonality effect and unfavorable currency exchange rate. Online travel agencies (IYW) generally lose money in the first quarter. Fewer people go on vacations at the beginning of the year.

Expedia’s total adjusted costs and expenses rose 2% YoY to $2.44 billion mainly due to higher selling and marketing spending and increased investment in technology. Despite the rise, as a percentage of the revenues, Expedia’s total costs and expenses fell by 155 basis points to 93.4% from 94.6% in the first quarter of 2018. As a result of higher revenues and efficient cost management, Expedia’s adjusted EBITDA in the fourth quarter increased 42% YoY to $176 million.

Expedia’s first-quarter bottom-line results also benefited from a lower effective tax rate. The company’s adjusted effective tax rate was 7% in the first quarter—compared to 13% in the first quarter of 2018.


Expedia reiterated its outlook for fiscal 2019. The company continues to expect 10%–15% growth in its adjusted EBITDA this year, which in absolute terms signifies $2.17 billion–$2.27 billion. The midpoint is $2.22 billion. The projection is almost in line with analysts’ estimate of $2.23 billion.

Among the major online travel agencies, TripAdvisor (TRIP), Booking Holdings (BKNG), and Ctrip.com International (CTRP) will report their first-quarter results in the coming weeks. TripAdvisor’s adjusted EPS is expected to rise 4.7% YoY, while Ctrip.com International and Booking Holdings are projected to report YoY EPS falls of 53% and 6.1%, respectively.


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