Expedia Shares Slide As Costs Dent Results -- WSJ
February 09 2018 - 03:02AM
Dow Jones News
By Imani Moise
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 9, 2018).
Shares in Expedia Inc. plunged more than 18% in extended trading
Thursday after the travel company reported earnings were hurt by
increased spending.
Rising costs in the fourth quarter outpaced sales growth, and
the company forecast even more spending ahead as it focuses on
cloud infrastructure and marketing investments. The travel booking
company operates Expedia.com, Hotels.com and Orbitz.com among other
websites.
On a call with analysts, finance chief Alan Pickerill said
technology spending is expected to accelerate significantly faster
than sales growth in 2018.
Cloud spending, which climbed to $18 million from $2 million in
the fourth quarter, is expected to total $170 million for 2018.
The stock also plunged in October after the company warned
investors following its third-quarter earnings report that it would
ramp up spending to try to increase sales and fend off competitors
like Priceline Group Inc. Expedia said it is transitioning its
technology infrastructure to the cloud to expand its computing
power.
For Expedia sales grew 11% to $2.32 billion in the fourth
quarter, but total expenses jumped 16%. Direct costs for selling
and marketing were $121 million higher than the comparable year-ago
period, the company said.
Overall for the fourth quarter Expedia missed analysts' views.
The company reported a profit of $55.2 million, or 35 cents a
share, down from $79.5 million, or 51 cents a year earlier. The
most recent quarter was helped by a one-time $14 million benefit
related to the recent tax overhaul. On an adjusted basis per-share
earnings fell to 84 cents from $1.17.
Analysts polled by Thomson Reuters had forecast earnings of
$1.15 a share on $2.36 billion in sales.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
February 09, 2018 02:47 ET (07:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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