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Expedia net profit down 12%

Analysis

Expedia has reported a 15% increase in revenue for the three months to 31-Mar-2011 to USD822.2 million, but operating income and net income decreased due to increased expenses related to investments in technology and international expansion. Expedia shares traded 1.4% higher on Friday.

Summary
  • Expedia reports a 15% increase in revenue for Q1 2011, reaching USD822.2 million.
  • Operating income and net income decreased due to higher expenses related to technology investments and international expansion.
  • Operating income dropped by 4%, while net income dropped by 12% to USD52 million.
  • The revenue growth was primarily driven by increased hotel revenue and advertising and media revenue.
  • Hotel revenue accounted for 59% of total worldwide revenue, followed by advertising and media at 15% and air at 13%.
  • Expedia's shares traded 1.4% higher following the announcement.

Operating income dropped 4%, while net income dropped 12% to USD52 million.

The revenue increase at the company was driven by an increase in hotel revenue and advertising and media revenue. As a percentage of total worldwide revenue in the first quarter of 2011, hotel accounted for 59%, advertising and media accounted for 15%, air accounted for 13% and all other revenue accounted for the remaining 13%.

Selected share price movements (% change): 29-Apr-2011

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