Expedia's 3Q profit up 23 pct as bookings rise

BELLEVUE, Wash. - Bookings are up at online travel company Expedia Inc., pushing its profit up despite prices for flights and hotels holding or softening.

The company said Thursday that the rise in bookings, which helped its third-quarter profit rise 23 percent, points to better days ahead for the rest of the travel industry, still hurting as consumers and businesses limit their spending during the recession.

The company said it earned $117 million, or 40 cents a share, in the three-month period that ended Sept. 30. That's up from $94.8 million, or 33 cents a share, a year earlier.

Excluding one-time items, the company earned 48 cents a share in the period.

Analysts polled by Thomson Reuters expected 43 cents a share. Analysts typically exclude one-time items from their estimates.

Shares rose some 4 percent when trading opened, but fell back slightly. Shares lost 4 cents to close at $24.30 Thursday.

Revenue rose 2 percent to $852.4 million, above analyst estimates of $828.9 million.

Domestic revenue fell 2 percent while international rose 10 percent. The company, which operates sites such as hotels.com and its namesake site, said gross bookings rose 9 percent from the prior year, with a 26 percent increase in transactions.

Those bumps were offset by low airfares and hotel room rates. The travel slump has caused airlines, hotel operators and others in the travel industry to lower their prices to compete although it's widely expected that as the economy rebounds, these prices too will rise, and air fares are creeping up for the holiday period.

Expedia, too, has been cutting its fees to compete. CEO Dara Khosrowshahi said it appears to be working.

"Travelers are clearly responding to our improving value proposition, as we broaden our fee cuts and increase the depth and breadth of our global supply," Khosrowshahi said.

Expedia's worldwide air revenue fell 8 percent in the quarter even as ticket volumes rose 27 percent. That's because revenue per ticket fell 28 percent.

The company's global hotel booking revenue rose 3 percent as the company saw a 27 percent increase in room nights stayed. That was dampened partly by a 19 percent drop in room rates.

Expedia's advertising and media revenue rose 5 percent in the quarter and accounted for 10 percent of its worldwide revenue.

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