Expedia, Inc. (Nasdaq: EXPE) rose 3 1/2 to 12 9/16 in the first few minutes of trading Tuesday after the online travel company reported a much smaller loss than expected for the first quarter ended September 30th.
Revenue for the quarter rose 115 percent from a year earlier to $76 million, as the loss before charges narrowed to $1.6 million, or 4 cents per share, from $13.1 million, or 30 cents. Analysts had expected a 26 cent loss for the quarter.
Bellevue, Washington-based Expedia attributed the revenue gain to its decreased reliance on airline fares, as well as lower operating expenses.
The company has been promoting discounted hotel reservations and now relies on airline tickets for less than a quarter of revenue and less than a third of gross profit, according to president and chief executive officer Richard Barton.
“We are pleased with our financial performance this quarter,” said chief financial officer Greg Stanger. The company strengthened its cash position with a $60 million financing arrangement completed in August, giving it $122 million in cash and marketable securities at quarter’s end, Stanger said.
Stanger added, “We anticipate that our operating loss will increase in the December quarter as we increase our investment in sales and marketing.”
Gross profit, at $26 million, was up 110 percent from a year earlier. Revenue from agency transaction commissions and fees rose 115 percent year-over-year to $22 million. Operating expenses, meanwhile, dropped 22 percent to $29 million, excluding non-cash amortization of goodwill and intangibles.
Expedia, backed by Microsoft Corp., operates online travel sites in the United States, Canada, Germany and the United Kingdom. Forrester Research predicts online travel sites will see $29 billion in business by 2003, a four-fold increase over 1999.