Expedia Faces Market Concerns Despite Solid Fourth-Quarter Results

Expedia, one of the leading online travel agencies, experienced a significant decline in its stock prices during late trading, despite reporting strong financial results for the fourth quarter. The underperformance of certain travel measures compared to Street estimates has raised concerns regarding the overall health of the travel market.

Leadership Change at Expedia

There is also news of a leadership change within Expedia. Peter Kern, the current CEO, will be stepping down on May 13 and will be replaced by Ariane Gorin. Gorin, who has been with the company since 2013 and most recently served as president for business, will take over as the new CEO. Kern, on the other hand, will remain as vice chairman and continue to be a member of the board. It is important to note that Barry Diller will continue in his role as Expedia's board chairman.

Stock Performance

At present, Expedia's shares have experienced a dip of 10.6%, currently trading at $142.65.

Fourth-Quarter Financial Results

For the fourth quarter, Expedia reported revenue of $2.89 billion, a 10% increase from the previous year, which aligned with Street consensus. Gross bookings reached $21.67 billion, reflecting a 6% increase but falling slightly short of the anticipated $22 billion consensus. The number of booked room nights totaled 77.4 million, marking a 9% growth but slightly below the Street's projected growth rate of 10%.

Adjusted earnings per share stood at $1.72, surpassing the Street consensus by five cents. Under generally accepted accounting principles, the company earned 92 cents per share. Expedia's adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization) reached $532 million, outperforming the Street estimate of $524 million.