Expedia Misses Where it Counts

Expedia (Nasdaq: EXPE  ) reported earnings on Feb. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Expedia beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped significantly.

Gross margins expanded, operating margins dropped, net margins shrank.

Revenue details
Expedia reported revenue of $974.9 million. The 21 analysts polled by S&P Capital IQ wanted to see revenue of $929.0 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $787.1 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.63. The 24 earnings estimates compiled by S&P Capital IQ predicted $0.65 per share. GAAP EPS of $0.05 for Q4 were 90% lower than the prior-year quarter's $0.52 per share. (The prior-year quarter included $0.08 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 76.9%, 20 basis points better than the prior-year quarter. Operating margin was 11.6%, 30 basis points worse than the prior-year quarter. Net margin was 0.7%, 820 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $943.9 million. On the bottom line, the average EPS estimate is $0.31.

Next year's average estimate for revenue is $4.53 billion. The average EPS estimate is $3.62.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 356 members out of 452 rating the stock outperform, and 96 members rating it underperform. Among 157 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 138 give Expedia a green thumbs-up, and 19 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Expedia is outperform, with an average price target of $63.33.

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