Please ensure Javascript is enabled for purposes of website accessibility

Why Expedia Stock Declined Today

By Evan Niu, CFA – May 21, 2020 at 12:12PM

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 travel booking specialist reported first-quarter earnings results.

What happened

Shares of Expedia (EXPE -0.55%) have declined today, down by 1% as of 12:20 p.m. EDT, after the online travel booking company reported first-quarter results. The stock was down as much as 6% in morning trading but has since recovered some of those losses.

So what

Revenue in the first quarter came in at $2.21 billion, slightly ahead of the $2.13 billion in sales that analysts were expecting. That translated into an adjusted net loss of $258 million, or $1.83 per share, a substantial miss compared to the $1.37 per share in adjusted net losses that Wall Street was looking for. Gross bookings fell 39% to $17.9 billion due to the novel coronavirus pandemic.

Expedia logo

Image source: Expedia.

"Like all travel companies, Expedia Group suffered a major reduction in business since the onset of COVID-19," CEO Peter Kern said in a statement. "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."

Now what

Expedia raised nearly $4 billion in capital in April, consisting of $1.2 billion from private equity firms Silver Lake and Apollo Global and another $2.75 billion in unsecured senior notes.

On the conference call with analysts, CFO Eric Hart reassured investors that the company has other ways to exercise cost discipline if the crisis continues. "If COVID were to have a protracted impact, we do have additional cost levers that we can pull, and we will do so at the appropriate time," Hart said. Expedia is not providing guidance for 2020 due to ongoing uncertainty, but did say that revenue in the second quarter is expected to decline and resemble recent booking trends.

Evan Niu, CFA 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, Inc. Stock Quote
Expedia, Inc.
EXPE
$93.69 (-0.55%) $0.52

*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
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

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.