The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Expedia beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share dropped significantly.
Margins dropped across the board.
Expedia recorded revenue of $1.20 billion. The 20 analysts polled by S&P Capital IQ hoped for revenue of $1.17 billion on the same basis. GAAP reported sales were 5.1% higher than the prior-year quarter's $1.14 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 $1.32. The 23 earnings estimates compiled by S&P Capital IQ predicted $1.26 per share. GAAP EPS of $1.21 for Q3 were 19% lower than the prior-year quarter's $1.50 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 79.7%, 190 basis points worse than the prior-year quarter. Operating margin was 19.1%, 670 basis points worse than the prior-year quarter. Net margin was 14.3%, 410 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $905.0 million. On the bottom line, the average EPS estimate is $0.61.
Next year's average estimate for revenue is $3.93 billion. The average EPS estimate is $3.00.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 345 members out of 440 rating the stock outperform, and 95 members rating it underperform. Among 142 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 122 give Expedia a green thumbs-up, and 20 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 $52.71.
Looking for alternatives to Expedia? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.
- Add Expedia to My Watchlist.
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.