It's an ongoing theme this earnings season: a company reports shrinking returns, but exceeds Wall Street estimates, sending its shares higher. This time it's Expedia ( EXPE), whose stock soared 28% in afternoon trading Thursday after surprising investors with better-than-foreseen profits.

The company said its adjusted income was 21 cents a share, better than analysts' estimates of 17 cents. Including restructuring charges, Expedia earned $39.4 million, or 14 cents a share, in the first quarter, off 23% from the $51.3 million, or 17 cents per share, it earned a year ago.

First-quarter revenue came in at $635.7 million, down 8% from $687.8 million last year but surpassing analysts' targets of $588 million.

The Bellevue, Wash., Internet travel company attributed the top-line decline to fewer leisure bookings during the quarter, as consumers continued to pare down on perceived luxuries. This was partially offset, the company said, by increased revenue from advertising and rental car bookings.

Revenue from air travel fell 17% in the quarter compared with a year ago, Expedia said, while ticket volume slipped 4%.

The results came on the heels of a price war instigated by Expedia in March, when the company announced that it would wave its airline-ticket booking fees through May 31.

Expedia shares were up $3.16, or 30%, to $13.75, on volume of nearly 10 million shares. Average daily volume is 4.7 million.

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