Expedia Group Inc. gained in after-hours trading after the company said strong demand for the rest of the year and into 2023 can counter a hit to bookings from an industry-wide slowdown in July that was exacerbated by hurricanes late in the season.
(Bloomberg) — Expedia Group Inc. gained in after-hours trading after the company said strong demand for the rest of the year and into 2023 can counter a hit to bookings from an industry-wide slowdown in July that was exacerbated by hurricanes late in the season.
“We have not seen trade downs or major moves or shifts in demand patterns,” Expedia Chief Executive Officer Peter Kern said on a call with analysts Thursday. “Putting the hurricane aside, it’s really been a very steady and very strong demand picture.”
Expedia shares were about 1.5% higher in extended trading in New York, after dropping about 7% on a third-quarter earnings report after the market close that partly missed analyst forecasts. Executives also announced that they would continue share repurchases.
The Seattle-based company on Thursday said gross bookings, the total value of transactions booked adjusted for cancellations and refunds, rose 28% to $23.99 billion, missing the average analyst estimate of $25.1 billion. Kern said that the measure dropped 1% in July, but rebounded in August only to take a hit in September and October due to hurricanes. The company reported 93.2 million room nights in the third quarter, compared with an analyst estimate for 98.7 million.
However, Expedia also said that revenue rose 22% to a record $3.62 billion for the quarter. That just beat the average analyst projection of $3.61 billion. The report strengthens the picture of recovery in some parts of the travel industry, after Airbnb Inc. and Booking Holdings Inc., also reported quarterly revenue records earlier this week. Booking also sees gains continuing in the current quarter, and forecast room nights booked in October will beat 2019’s levels by 12%.
Investors have punished all three companies this year as the macroeconomic outlook darkens. Shares of Expedia have sunk more than 50%, while rivals Booking and Airbnb have declined around 24% and 45%, respectively. Airbnb shares had their biggest drop Wednesday since they started trading in 2020 after the company missed analysts’ estimates on nights booked, and warned the pace of bookings would “moderate slightly” in the current period.
Executives are nevertheless upbeat about the state of travel. Booking consumers aren’t trading down or changing their preferences, CEO Glenn Fogel said Wednesday. Airbnb CEO Brian Chesky said the state of the economy won’t change how the business is run, saying he’s confident about the fourth quarter.
Expedia reported adjusted earnings before interest, taxes, depreciation and amortization of $1.08 billion, compared with the estimate of $1.06 billion. Adjusted earnings per share came in at $4.05, compared with the estimate of $4.07.
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