The Gory Details of Expedia's Earnings Miss

Seth Jayson, The Motley Fool
Updated

Expedia (NAS: EXPE) reported earnings on July 25. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), Expedia missed estimates on revenues and whiffed on earnings per share.

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


Gross margins increased, operating margins dropped, net margins dropped.

Revenue details
 Expedia reported revenue of $1.21 billion. The 24 analysts polled by S&P Capital IQ predicted net sales of $1.26 billion on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $1.04 billion.

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 $0.64. The 25 earnings estimates compiled by S&P Capital IQ anticipated $0.81 per share. Non-GAAP EPS of $0.64 for Q2 were 28% lower than the prior-year quarter's $0.89 per share. GAAP EPS of $0.51 for Q2 were 33% lower than the prior-year quarter's $0.76 per share.

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 78.2%, 30 basis points better than the prior-year quarter. Operating margin was 8.3%, 690 basis points worse than the prior-year quarter. Net margin was 5.9%, 420 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $1.40 billion. On the bottom line, the average EPS estimate is $1.42.

Next year's average estimate for revenue is $4.74 billion. The average EPS estimate is $3.23.

Investor sentiment
 The stock has a two-star rating (out of five) at Motley Fool CAPS, with 360 members out of 456 rating the stock outperform, and 96 members rating it underperform. Among 149 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 131 give Expedia a green thumbs-up, and 18 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 $71.61.

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The article The Gory Details of Expedia's Earnings Miss originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.

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