Why Orbitz Shares Skyrocketed

Why Orbitz Shares Skyrocketed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Orbitz Worldwide were flying higher today, gaining as much as 44% after a blowout earnings report.

So what: The online travel merchant showed strong growth in hotels during the all-important summer vacation season. Adjusted earnings per share climbed to $0.17, soaring past analyst estimates at $0.09, while revenue moved up 12%, to $225.8 million, ahead of the consensus at $218.9 million. Airline-ticket sales were unchanged, but hotel revenue jumped 40%, which appears to be the main growth market in the industry. Orbitz also issued current-quarter revenue guidance above the Wall Street mark, saying it now expects sales of $214-$220 million. Analysts had projected just $213.8 million.

Now what: Shares of priceline.com also jumped after hours during its earnings report today, and TripAdvisor shot up after its earnings release two weeks ago, so this seems to be more of an industry-wide trend than anything else, as the travel business comes back to life with the economic rebound. With today's gains, Orbitz shares have jumped more than 300% this year. While the company is clearly in the midst of a vibrant turnaround, the stock appreciation seems to have outpaced the company's actual earnings growth. I'd say Orbitz has reached cruising altitude for now.

The article Why Orbitz Shares Skyrocketed originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published