The 10-second takeaway
For the quarter ended March 31 (Q1), Expedia beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share contracted. GAAP loss per share grew.
Margins shrank across the board.
Expedia reported revenue of $1.01 billion. The 23 analysts polled by S&P Capital IQ foresaw sales of $967.6 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $816.5 million.
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 $0.25. The 25 earnings estimates compiled by S&P Capital IQ anticipated $0.23 per share. Non-GAAP EPS of $0.25 for Q1 were 3.8% lower than the prior-year quarter's $0.26 per share. (The prior-year quarter included -$0.17 per share in earnings from discontinued operations.) GAAP EPS were -$0.77 for Q1 versus -$0.02 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 75.2%, 30 basis points worse than the prior-year quarter. Operating margin was -4.4%, much worse than the prior-year quarter. Net margin was -10.3%, 990 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.24 billion. On the bottom line, the average EPS estimate is $0.89.
Next year's average estimate for revenue is $4.79 billion. The average EPS estimate is $3.39.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 354 members out of 454 rating the stock outperform, and 100 members rating it underperform. Among 141 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 119 give Expedia a green thumbs-up, and 22 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Expedia is outperform, with an average price target of $72.71.
Is Expedia the right Internet stock for your portfolio? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average retailing powerhouse. 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 position in any of the stocks mentioned. 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.