The 10-second takeaway
For the quarter ended June 30 (Q2), Expedia beat expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share dropped significantly.
Margins shrank across the board.
Expedia reported revenue of $1.04 billion. The 19 analysts polled by S&P Capital IQ anticipated a top line of $988.1 million on the same basis. GAAP reported sales were 1.6% higher than the prior-year quarter's $1.02 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.89. The 23 earnings estimates compiled by S&P Capital IQ anticipated $0.71 per share. GAAP EPS of $0.76 for Q2 were 24% lower than the prior-year quarter's $1.00 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 77.9%, 270 basis points worse than the prior-year quarter. Operating margin was 15.2%, 720 basis points worse than the prior-year quarter. Net margin was 10.1%, 360 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.13 billion. On the bottom line, the average EPS estimate is $1.25.
Next year's average estimate for revenue is $3.81 billion. The average EPS estimate is $2.82.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 337 members out of 433 rating the stock outperform, and 96 members rating it underperform. Among 139 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 115 give Expedia a green thumbs-up, and 24 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Expedia is hold, with an average price target of $42.23.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.