Travelzoo falls as 3Q outlook disappoints


NEW YORK -- Travelzoo's stock dropped to the lowest level in more than two years on Friday as the online travel company predicted that its third-quarter profit would shrink about 40 percent from a year ago.

The company, which offers online deals on flights, hotels and vacation packages, also said that it is changing its hotel business because customers and hotels don't like it enough. It said it is in talks to buy a hotel booking website.

Travelzoo faces tough competition from other online travel companies such as Expedia Inc. and Priceline.com Inc.

Travelzoo Inc. said Friday that it expects profit for the three months ended Sept. 30 of 20 to 22 cents per share, with revenue of $35 million to $35.5 million.

A year ago it earned 36 cents per share on revenue of $38.7 million.

Its stock fell $3.21, or 14 percent, to $20.29 in morning trading. Earlier in the session the shares hit $19.34, their lowest point since September 2010. Over the past 12 months, shares had ranged from $19.38 to $34.95.

The New York company plans to report its full third-quarter financial results on Oct. 25.