What happened
Shares of online travel booking company Expedia (EXPE 0.58%) were tumbling this morning after the company reported its first-quarter results. Despite its beating analysts' top- and bottom-line consensus estimates, investors don't seem convinced that the company has fully bounced back from the pandemic.
The travel stock had fallen by 14.1% at 10:55 a.m. ET.
So what
Expedia reported a non-GAAP loss per share of $0.47 in the quarter, which was an improvement over the company's loss of $2.02 per share in the year-ago quarter. It also beat Wall Street's consensus estimate of a loss of $0.64 per share.
Image source: Getty Images.
The company's first-quarter sales also beat analysts' expectations, although barely. Expedia's $2.25 billion in revenue -- an increase of 81% year over year -- surpassed Wall Street's average estimate of $2.23 billion.
But despite the company beating analysts' top and bottom-line estimates, investors may have been focused on the fact that Expedia is still trying to catch up to its pre-pandemic performance.
For example, total gross bookings were up 58% year-over-year -- to $24.4 billion -- but they were still 17% lower than the first quarter of 2019.
Additionally, the company's EBITDA of $173 million was "roughly flat" compared to the first quarter of 2019.
Investors may also be latching on to the fact that a fellow travel stock, Hilton Worldwide, issued lower-than-expected guidance today for its full-year outlook.
Now what
Expedia CEO Peter Kern said on the company's earnings call that despite COVID, inflation, and the war in Ukraine, "pent-up demand that's out there for travel seems to be outweighing anything the market can throw at it."
But Expedia investors clearly aren't as optimistic. And with inflation at a 40-year high and the Federal Reserve poised to raise rates this week -- which could potentially affect growth in the U.S. economy -- it's not surprising that investors are taking a cautious approach to Expedia's stock right now.
