Expedia’s CEO says the company is ‘feeling very good about a summer recovery that should be very robust.’
was falling sharply Tuesday even after revenue in the first quarter rose more than 80%, and CEO Peter Kern told analysts the online travel company was “feeling very good about asummer recovery.”
(ticker: EXPE) reported first-quarter revenue of nearly $2.25 billion, up from about $1.25 billion a year earlier. Analysts surveyed by FactSet expected revenue of $2.25 billion. Gross bookings in the quarter jumped 58% to $24.4 billion.
The company reported an adjusted loss of 47 cents a share vs. expectations for a loss of 48 cents.
“As we have seen many times during Covid, this quarter was a tale of two stories,” said Peter Kern, chief executive of Expedia. “There was early impact from Omicron leftover from late last year, which faded as the turnaround in demand reached new highs since the start of Covid. While the war in Ukraine did slow some of the recovery in Europe, there too we see travel at new highs since the start of the pandemic.”
Kern added in a press release that Expedia continues to “see positive indicators for a strong recovery in leisure travel this summer,” and also was “pleased to see city, business, and international travel coming back.”
Kern later told analysts in a conference call that despite Covid, rising inflation, and the situation in Ukraine, “the pent-up demand that’s out there for travel seems to be outweighing anything the market can throw at it and we continue to be feeling very good about a summer recovery that should be very robust.”
The stock fell 11.4% to $154.97.
Analyst Brad Erickson at RBC Capital said Expedia “remains well-positioned to benefit as developed market travel rebounds.” But, he added, that with both a strong recovery and future margin expansion “fairly baked into shares” he was lowering the price target to $185 from $200. He kept his rating on Expedia at Sector Perform.
Doug Anmuth at J.P. Morgan said Expedia’s first-quarter report doesn’t change his view that the company “is on a faster product innovation velocity while greater discipline is driving up margins.
“However, visibility around normalized growth remains limited, and we would like to see evidence of EXPE’s stronger execution driving faster yet more profitable growth.”
Anmuth maintained a Neutral stance on the shares. Anmuth’s December 2022 price target of $206 is down from a prior $216.
Write to Joe Woelfel at email@example.com