NEW YORK (AP) — A boom in hotel bookings drove Expedia's third-quarter results past Wall Street's expectations, lifting shares Friday.
THE SPARK: Expedia Inc.'s third-quarter net income fell 18 percent, the online travel agency said late Thursday, but its results excluding one-time costs and 17 percent revenue growth impressed investors. Strong hotel bookings in Europe, Asia and North America helped drive the increase. Expedia's core business is selling hotel stays through sites including Expedia and Hotels.com.
THE BIG PICTURE: Expedia makes a bulk of is money through sales of hotel rooms. Like other online travel agencies, they get a standard commission off each room they sell. Growth in the hotel sector is offsetting a continued decline in revenue from its airfare transactions.
THE ANALYSIS: Jefferies analyst Brian Fitzgerald also noted that Expedia's mobile applications appear to be gaining traction, and he expects increasing numbers of customers to book travel on their phones and tablets.
Cantor Fitzgerald analyst Naved Khan raised his price target on the stock by $1 to $67, meaning he expects shares to grow 31 percent from their close Thursday.
SHARE ACTION: Up 14 percent, or $7.32, to $58.57 in morning trading. Shares have more than doubled this year and are just shy of a year high of $60.29, touched in September.