Please ensure Javascript is enabled for purposes of website accessibility

Expedia Rises in Pre-Market Trading Despite First-Quarter Misses

By Eric Volkman – May 21, 2020 at 9:33AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company is a poster child for businesses affected by the economic fallout of the coronavirus pandemic.

Investors seem bullish about the prospects of online travel agency Expedia Group (EXPE -3.05%), even after the company posted first-quarter fiscal 2020 earnings that fell short of expectations.

The quarter saw the company endure a 15% year-over-year decline in revenue, to just under $2.21 billion. That was on the back of gross bookings that cratered by 39% to nearly $17.9 billion. The non-GAAP (adjusted) net loss deepened considerably, to $258 million ($1.83) from Q1 of fiscal 2019's $40 million.

London as viewed from the window of an airplane.

Image source: Getty Images.

On average, analysts following the stock were anticipating $2.29 billion in revenue, and an adjusted bottom-line loss of only $1.04.

It nearly goes without saying by now that Expedia, a top name in the travel industry, is suffering greatly from the crippling blow the SARS-CoV-2 coronavirus has landed on its sector. Stay-at-home mandates in force throughout the world, not to mention fear of the still-spreading virus, have severely curtailed travel activity.

Expedia is battening down the hatches, shoring up its capital base with $3.2 billion in new funding secured last month. This comprises $2 billion in debt, and a $1.2 billion investment by a pair of private equity firms, Apollo Global Management and privately held Silver Lake Capital Partners. 

The company gave itself a bit of a pat on the back in regards to preparing for the impact of the coronavirus on its business. "Fortunately, we were ahead of the game having implemented cost savings measures earlier this year, and with the added pressure from COVID-19 we accelerated and expanded our ambition on improving our long-term cost structure," management said.

In pre-market trading on Thursday, Expedia's shares were up by nearly 4.5%; the previous day they closed 4.2% higher, eclipsing the gains of the broader market, and many top consumer goods stocks.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Expedia Stock Quote
Expedia
EXPE
$98.99 (-3.05%) $-3.11
Apollo Global Management Stock Quote
Apollo Global Management
APO

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.