Expedia profit falls, faces legal fight with United Airlines
BELLEVUE, Wash. (AP) — Expedia Group Inc. boosted fourth-quarter revenue by selling more hotel rooms and airline tickets, but write-downs pushed profit down 69 percent, to $17 million.
The results still beat expectations for the online travel agency.
The shares jumped $9.13, or 7 percent, to $137 in extended trading Thursday after losing a penny in the regular session. At Thursday’s close, the stock had gained 13.5 percent since the beginning of the year, while the Standard & Poor’s 500 index rose nearly 9 percent.
Expedia said that fourth-quarter adjusted profit was $1.18 per share, topping the $1.07 average forecast of 11 analysts surveyed by Zacks Investment Research.
Revenue rose 10 percent to $2.56 billion. Eleven analysts surveyed by Zacks expected $2.54 billion.
About two-thirds of Expedia sales come from booking lodging on sites including Hotels.com, and that revenue grew 10 percent. Growth in the vacation-rental segment HomeAway — a competitor to Airbnb — slowed to 20 percent in the fourth quarter but grew 29 percent for the full year.
Airline revenue rose 18 percent, as Expedia sold more tickets and at higher average prices.
However, the Bellevue, Washington-based company is locked in a potentially damaging legal fight with a major airline customer.
This week Expedia said that United Airlines is threatening to pull flight information from its sites after a breakdown in talks over a new contract.
Expedia sued United and asked a federal judge to block the airline from cutting Expedia’s access to information about seats and fares. The companies’ current contract expires this fall.
In a heavily redacted complaint, Expedia said it would lose customers for years if United carried through on its threat.
United Airlines spokeswoman Maggie Schmerin said Expedia has refused to take part in “constructive discussions” about a new contract, and United expects its fares won’t be listed on Expedia sites after Sept. 30. She said that because Expedia might not be able to help United ticket holders after that date, United told Expedia it plans to bar Expedia from booking tickets for United flights on or after Oct. 1.