Analysts applaud Expedia''s quarter
The online travel site's stock climbed $1.38 to $18.13 early in the session.
After yesterday's market close, the company easily topped analysts’ estimates in its latest quarter. The company had also hurdled estimates in the previous two quarters.
Excluding non-cash stock-based compensation costs and amortization of goodwill and intangibles, the company reported a loss of $2.6 million, or 6 cents a share, on sales of $80 million.
First Call's analyst consensus was for a loss of 15 cents a share for the period. The company lost $10.3 million, or 26 cents a share, on sales of $44 million in the year ago period.
Including charges, Expedia posted a net loss of $25.3 million, or 53 cents a share, compared with a net loss of $43 million, or $1.07 a share, a year earlier.
According to Expedia, cash profitability is expected for June 2002.
Analysts greeted the results with positive reaction across the board.
At CIBC Oppenheimer, analyst Paul Keung reiterated a "strong buy" rating on the stock and maintained a price target of $20. Profitability for the company was still targeted for the end of fiscal 2002.
The analyst highlighted improvements in gross margin and tight controls on operating expenses as keys to the solid quarter. Keung noted that the outlook for the company remains strong, despite a potential weakening in advertising revenues, due to a fundamentally strong business strategy.
Analyst Tonia Pankopf at Goldman Sachs maintained a "market outperform" rating and raised revenue projections for fiscal 2001 and 2002 while narrowing loss estimates. The target date for cash profitability was moved up to the third quarter of 2002.
While noting that the company's revenue and operating metrics showed modest growth as compared to competitor Travelocity (Nasdaq: TVLY), Pankopf said that Expedia currently trades at a discount to other e-commerce platform peers.
At Morgan Stanley, Expedia was reiterated at a "long-term outperform" rating.
"We believe Expedia is clearly well situated to be one of the leading players within the Internet travel services segment over the next five years, with a leading technology infrastructure and a diverse revenue model," analyst Mary Meeker wrote in a research note.