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Eric Gillin
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Expedia Rallies After Profit

Eric Gillin

04/23/02 - 04:57 PM EDT

Online travel site Expedia (EXPE - Cramer's Take - Stockpickr) posted better-than-expected first-quarter numbers after Tuesday's bell, citing a big rise in vacation package sales. Its shares rose.

The online travel retailer reported net income of $5.7 million, or 9 cents a share, on a GAAP basis, reversing a year-ago net loss of $17.6 million, or 37 cents a share. Diluted adjusted earnings easily beat analyst estimates, coming in at 46 cents a share, vs. analyst expectations of 26 cents a share, according to Thomson Financial/First Call. The company reported revenue of $116 million, beating the $86.7 million analyst target.

Gross bookings came in at a whopping $1.1 billion, up more than $425 million from the year-ago quarter. One reason behind the strength: Gross bookings for vacation packages came in at $164 million, up 320% from year-ago levels.

"In particular, this quarter we saw our dynamic packaging business really hit its stride," said Richard Barton, Expedia's president and CEO.

The future looks equally bright. Expedia said full-year revenue would come in $100 million above the $450 million it budgeted for the 2002 fiscal year, while EBITDA will be $57 million above the $91 million it budgeted for the year. The next three quarters will show growth, but the end of the year will be weakest. "We expect revenue, pretax adjusted earnings and adjusted EBITDA to each peak in the third quarter before a seasonal decline in revenue in the fourth quarter," the company said.

Don't expect this windfall to benefit Microsoft's (MSFT - Cramer's Take - Stockpickr) bottom line, however. On Feb. 4, USA Networks (USAI - Cramer's Take - Stockpickr) became the controlling shareholder in the online travel company, which shifted to a fiscal year ending in December.

In after-hours trading on Instinet, shares of Expedia were the fourth most-active issue, gaining $2.57, or 3.6%, to $73.32 on 230,000 shares. During Tuesday's regular Nasdaq session, the stock slid 5%.