Orbitz shares up on revenue gains
Orbitz revenue grows in 4Q, hotel business shows improvements; shares jump
Orbitz Worldwide Inc.'s shares jumped Friday after the online travel company's fourth-quarter revenue exceeded market expectations, and there were signs that its hotel business was improving.
THE SPARK: Orbitz said Thursday that its loss for the quarter had widened as it wrote down the value of some assets. But its revenue increased 7 percent to $189.7 million, beating the $184.9 million that analysts polled by FactSet had anticipated.
For this year, Orbitz expects revenue to grow 2.5 to 5 percent — to about $798 million to $818 million. That bracketed what had been analysts' prediction: $809 million.
THE BIG PICTURE: Orbitz got a boost from more hotel room bookings and higher ad revenue. It also made more per hotel and air deal.
Orbitz has struggled recently with weaker demand due to the impact of the tough economy on consumers.
THE ANALYSIS: Stifel analyst Michael Purcell said that hotel trends are improving for Orbitz, but he believes it still faces some pressure in its U.S. flight-booking business. He said he remains concerned about competition and maintained a "Hold" rating.
SHARE ACTION: Orbitz shares increased 17 cents, or 5.4 percent, to $3.31 by Friday afternoon. Its shares are slowly recovering after taking a sharp dive this summer. The stock has traded between $2.07 and $4.75 in the past 52 weeks.
