Expedia Reports 50.8 Percent Increase in Quarterly Earnings

Expedia, Inc., reported its first-quarter results, saying that it earned $59.4 million, or 20 cents per share, for the quarter. That’s up from $39.4 million, or 14 cents per share, in the same quarter last year, an increase of 50.8 percent.

Gross bookings increased 27 percent (23 percent excluding the estimated benefit from year-on-year changes in foreign exchange rates) for the first quarter of 2010 compared with the first quarter of 2009, driven primarily by 18 percent growth in transactions and a 9 percent increase in average airfares. Domestic bookings increased 20 percent and international bookings increased 43 percent.

Revenue increased 13 percent for the first quarter, primarily driven by an increase in hotel and advertising and media revenues. Domestic revenue increased 5 percent while international revenue increased 31 percent. Domestic revenue growth trailed international growth primarily due to lower gross bookings growth and a greater impact from Expedia’s various fee reductions and eliminations.

Worldwide hotel revenue increased 12 percent for the first quarter, primarily due to an 18 percent increase in room nights stayed, including rooms delivered as a component of packages, partially offset by a 5 percent decline in revenue per room night. Revenue per room night declined due in part to lower hotel service fees in the first quarter of 2010 compared to the prior-year period.

Worldwide air revenue increased 6 percent for the first quarter, primarily due to a 22 percent increase in air tickets sold, partially offset by a 13 percent decrease in revenue per ticket due largely to Expedia dropping booking fees in March.

Advertising and media revenue (including net revenue from TripAdvisor Media Network) increased 34 percent for the first quarter, driven by a 39 percent increase in third-party revenue for TripAdvisor Media Network and a 24 percent increase in advertising revenue generated by Expedia’s transaction sites.

All other revenue sources (primarily car rentals and destination services) increased 6 percent for the first quarter. Hotel revenues accounted for 58 percent of worldwide revenues in the first quarter of 2010, while air, advertising and media and all other revenues each accounted for 14 percent of worldwide revenues in the first quarter.