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Expedia Group, Inc. (EXPE - Free Report) reported adjusted earnings of $4.05 per share for third-quarter 2022, beating the Zacks Consensus Estimate by 4.1%. The figure was up 15% on a year-over-year basis.
Revenues of $3.62 billion rose 22% year over year. Further, the figure surpassed the Zacks Consensus Estimate of $3.55 billion.
Year-over-year revenue growth was driven by a strong performance of all the business lines owing to solid travel demand during the third quarter.
Expedia’s gross bookings were $23.99 billion, which increased 28% year over year. Strong momentum in lodging and air bookings contributed well. Also, strong growth in ‘booked room nights’ and ‘stayed room nights’ was a positive.
We note that an uncertain macroeconomic environment is expected to prevail.
On a year-to-date basis, Expedia has lost 50.2% compared with the industry’s decline of 44.8%.
Nevertheless, EXPE’s growing efforts toward strengthening its products and technology offerings for the customers remain noteworthy.
Shares of Expedia inched up 2.5% in after-hours trading, which can be attributed to strong travel demand for the rest of 2022 and 2023.
Expedia Group, Inc. Price, Consensus and EPS Surprise
Retail: Expedia generated $2.71 billion of revenues (74.8% of the total revenues) from the segment, rising 15% year over year.
B2B: The segment yielded revenues of $788 million (21.8% of the total revenues), up 61% from the year-ago quarter’s level.
trivago: Revenues from the segment totaled $185 million (5.1% of the total revenues), up 13% year over year.
Revenues by Business Model
The Merchant model generated revenues of $2.43 billion (67.1% of the total revenues), up 26% year over year. Merchant gross bookings were $13.1 billion, up 33% from the prior-year quarter’s figure.
The Agency division generated revenues of $935 million (25.8% of the total revenues), improving 17% from the prior-year quarter’s tally. Agency gross bookings were $10.9 billion, up 23% year over year.
Advertising & Media, and Other generated $257 million of revenues (7.1% of the top line), increasing 7% from the year-ago quarter’s level. This can primarily be attributed to the strong performance of Expedia Media Solutions. Also, the growing momentum across travel insurance products contributed well.
Revenues by Geography
Expedia generated $2.4 billion of revenues (65.2% of the total revenues) from U.S. points of sale, up 8% from the prior-year quarter’s level.
Revenues generated by non-U.S. points of sale totaled $1.3 billion (34.8% of the total revenues), up 61% on a year-over-year basis.
Revenues by Product Line
Lodging revenues were $2.9 billion, accounting for 80% of the total revenues. EXPE witnessed 25% growth in Lodging revenues owing to the solid momentum in stayed room nights, which grew 20%. Also, 25% growth in booked room nights contributed well. Expedia witnessed a 5% rise in revenues per room night.
Air revenues were $100 million, representing 3% of the total revenues. EXPE witnessed a 61% rise in Air revenues owing to 69% growth in revenue per ticket and 32% in airfare.
Operating Details
Adjusted EBITDA was $1.1 billion in the reported quarter, up 26% from the year-ago quarter’s level.
Adjusted selling and marketing expenses were $1.65 billion, up 28% year over year. As a percentage of revenues, the figure expanded 220 basis points (bps) year over year.
Adjusted general and administrative expenses were $143 million, up 4% year over year. The figure contracted 60 bps year over year as a percentage of revenues.
Adjusted technology and content expenses were $257 million, up 15% from the year-ago quarter’s level. The figure contracted 50 bps from the year-ago quarter’s figure as a percentage of revenues.
EXPE reported a third-quarter operating income of $747 million, up 42% year over year. The operating margin expanded 290 bps year over year to 20.6% in the reported quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash and cash equivalents were $4.6 billion, down from $5.6 billion as of Jun 30, 2022. Short-term investments were $49 million compared with $26 million at the end of the previous quarter.
Long-term debt was $6.2 billion at the end of the third quarter compared with $6.7 billion at the end of the second quarter.
Expedia used $997 million of cash in operations during the quarter under review while $1.6 billion of cash was generated from operations in the last reported quarter.
Free cash flow was ($1.2) billion in the third quarter.
DICK’s is scheduled to release third-quarter 2022 results on Nov 22. The stock has lost 3.1% on a year-to-date basis. The long-term earnings growth rate for DKS is currently projected at 5%.
Home Depot is slated to report third-quarter 2022 results on Nov 15. The stock has lost 32.1% on a year-to-date basis. The long-term earnings growth rate for HD is currently projected at 11.2%.
Ross Stores is slated to report third-quarter 2022 results on Nov 17. The stock has lost 18.4% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.
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Expedia (EXPE) Q3 Earnings & Revenues Beat Estimates, Rise Y/Y
Expedia Group, Inc. (EXPE - Free Report) reported adjusted earnings of $4.05 per share for third-quarter 2022, beating the Zacks Consensus Estimate by 4.1%. The figure was up 15% on a year-over-year basis.
Revenues of $3.62 billion rose 22% year over year. Further, the figure surpassed the Zacks Consensus Estimate of $3.55 billion.
Year-over-year revenue growth was driven by a strong performance of all the business lines owing to solid travel demand during the third quarter.
Expedia’s gross bookings were $23.99 billion, which increased 28% year over year. Strong momentum in lodging and air bookings contributed well. Also, strong growth in ‘booked room nights’ and ‘stayed room nights’ was a positive.
We note that an uncertain macroeconomic environment is expected to prevail.
On a year-to-date basis, Expedia has lost 50.2% compared with the industry’s decline of 44.8%.
Nevertheless, EXPE’s growing efforts toward strengthening its products and technology offerings for the customers remain noteworthy.
Shares of Expedia inched up 2.5% in after-hours trading, which can be attributed to strong travel demand for the rest of 2022 and 2023.
Expedia Group, Inc. Price, Consensus and EPS Surprise
Expedia Group, Inc. price-consensus-eps-surprise-chart | Expedia Group, Inc. Quote
Revenues by Segment
Retail: Expedia generated $2.71 billion of revenues (74.8% of the total revenues) from the segment, rising 15% year over year.
B2B: The segment yielded revenues of $788 million (21.8% of the total revenues), up 61% from the year-ago quarter’s level.
trivago: Revenues from the segment totaled $185 million (5.1% of the total revenues), up 13% year over year.
Revenues by Business Model
The Merchant model generated revenues of $2.43 billion (67.1% of the total revenues), up 26% year over year. Merchant gross bookings were $13.1 billion, up 33% from the prior-year quarter’s figure.
The Agency division generated revenues of $935 million (25.8% of the total revenues), improving 17% from the prior-year quarter’s tally. Agency gross bookings were $10.9 billion, up 23% year over year.
Advertising & Media, and Other generated $257 million of revenues (7.1% of the top line), increasing 7% from the year-ago quarter’s level. This can primarily be attributed to the strong performance of Expedia Media Solutions. Also, the growing momentum across travel insurance products contributed well.
Revenues by Geography
Expedia generated $2.4 billion of revenues (65.2% of the total revenues) from U.S. points of sale, up 8% from the prior-year quarter’s level.
Revenues generated by non-U.S. points of sale totaled $1.3 billion (34.8% of the total revenues), up 61% on a year-over-year basis.
Revenues by Product Line
Lodging revenues were $2.9 billion, accounting for 80% of the total revenues. EXPE witnessed 25% growth in Lodging revenues owing to the solid momentum in stayed room nights, which grew 20%. Also, 25% growth in booked room nights contributed well. Expedia witnessed a 5% rise in revenues per room night.
Air revenues were $100 million, representing 3% of the total revenues. EXPE witnessed a 61% rise in Air revenues owing to 69% growth in revenue per ticket and 32% in airfare.
Operating Details
Adjusted EBITDA was $1.1 billion in the reported quarter, up 26% from the year-ago quarter’s level.
Adjusted selling and marketing expenses were $1.65 billion, up 28% year over year. As a percentage of revenues, the figure expanded 220 basis points (bps) year over year.
Adjusted general and administrative expenses were $143 million, up 4% year over year. The figure contracted 60 bps year over year as a percentage of revenues.
Adjusted technology and content expenses were $257 million, up 15% from the year-ago quarter’s level. The figure contracted 50 bps from the year-ago quarter’s figure as a percentage of revenues.
EXPE reported a third-quarter operating income of $747 million, up 42% year over year. The operating margin expanded 290 bps year over year to 20.6% in the reported quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash and cash equivalents were $4.6 billion, down from $5.6 billion as of Jun 30, 2022. Short-term investments were $49 million compared with $26 million at the end of the previous quarter.
Long-term debt was $6.2 billion at the end of the third quarter compared with $6.7 billion at the end of the second quarter.
Expedia used $997 million of cash in operations during the quarter under review while $1.6 billion of cash was generated from operations in the last reported quarter.
Free cash flow was ($1.2) billion in the third quarter.
Zacks Rank & Other Stocks to Consider
Currently, Expedia carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the retail-wholesale sector are DICK’s Sporting Goods (DKS - Free Report) , Home Depot (HD - Free Report) and Ross Stores (ROST - Free Report) , each currently carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DICK’s is scheduled to release third-quarter 2022 results on Nov 22. The stock has lost 3.1% on a year-to-date basis. The long-term earnings growth rate for DKS is currently projected at 5%.
Home Depot is slated to report third-quarter 2022 results on Nov 15. The stock has lost 32.1% on a year-to-date basis. The long-term earnings growth rate for HD is currently projected at 11.2%.
Ross Stores is slated to report third-quarter 2022 results on Nov 17. The stock has lost 18.4% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.