Online Travel agency Expedia Inc. (NASDAQ: EXPE) reported on Friday that fiscal second quarter earnings fell by 25%; however shares gained in afterhours trading as it beat Street’s estimations.
Revenue from hotel booking business which generates about three fourths of total revenues for Expedia soared 16% as overnight stays booking increased by 22 percent for the period. Nevertheless, revenue from its airline ticket booking business dropped 8%.
The company said that it was experiencing growth in corporate travel fees and advertising revenue.
Expedia will pay lower income tax rate of 21.3% down from 27.3% in the corresponding period of last year as it earned most of its revenues from international markets.
For the period, Expedia’s net income stood at $105.2 million, or 76 cents per share, down from last year’s net income of $140.4 million, or $1.01 per share.
The company said after excluding stock-based compensation and other onetime expenses, earnings would have been 89 cents a share, compared with 72 cents per share on that basis a year ago.
Analysts forecasted for the company to earn 71 cents after excluding onetime expenses.
Revenue soared 14 percent to $1.04 billion from $913.6 million. Analysts polled by FactSet Research projected revenue of $987.3 million.
Bookings volume jumped 13 percent, thanks mainly to a surge in nights booked at hotels. Nonetheless, revenue per hotel room fell 5 percent partly due to decline in rooms’ prices and discounting by the company’s Hotwire brand.
Average airfares booking climbed 5 percent, but lower fees/commission from airlines resulted in Expedia receiving 11 percent less per ticket.