Expedia Beats Estimates

Sales rise 5%.
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Updated from 4:36 p.m. EST

Third-quarter profit fell at

Expedia

(EXPE) - Get Report

but the company surpassed analysts' expectations.

The online travel company said Thursday that profit for the quarter ended Sept. 30 fell to $59 million, or 17 cents a share, from $82 million, or 23 cents a share, a year earlier.

Excluding items, the company earned $117.2 million, or 34 cents a chare, compared with 126.9 million, or 35 cents a share, a year earlier.

Sales increased 5% to $613.9 million in the quarter, compared with $584.7 million in the same quarter last year. Expedia said growth was primarily driven by increased worldwide merchant hotel revenue, partially offset by a decline in domestic air revenue.

Analysts surveyed by Thomson Financial were looking for a profit of 30 cents-a-share-before-items on sales of $612.3 million.

"Much progress has been made, though it's been ever slow to come through in the performance of our largest point of sale, Expedia.com," said Barry Diller, Expedia's Chairman and Senior Executive. "But behind the scenes, where it all happens -- or doesn't -- there is growing confidence that our investments and operational improvements are sound, and will begin to show returns in the new year."

Shares of Expedia fell 29 cents, or 1.7%, in after-hours trading.