Profits at online travel service

Travelzoo

(TZOO) - Get Report

soared 240% in the third quarter, a gain that is almost as impressive as the 552% runup in the company's stock this year.

In the quarter, the New York-based company earned $2.1 million, or 12 cents a share, compared with $617,000, or 3 cents a share, in the year-ago period.

The one Wall Street analyst who had been following the stock until a week ago had estimated Travelzoo would earn 8 cents in the quarter.

Revenue at Travelzoo doubled to $9.5 million.

Most of Travelzoo's revenue comes from online advertising spots purchased by travel companies. Travelzoo specializes in helping consumers search the Internet to find travel deals and special offers.

Until recently, Travelzoo was a little-known company that garnered little market interest. Earlier this year, the stock was trading below $8 and just a few thousand shares traded each day.

But this summer, the shares became a favorite of the momentum crowd, and the stock soared, along with renewed interest by investors in online travel sites and Internet search engines.

When the company announced in September that it would sell shares in a private placement to a group of unnamed investors at $40 a share, the stock traded as high as $76 a share before falling back.

But the discounted stock sale only dented Travelzoo's amazing run. The stock closed Monday at $56.88. In premarket trading, shares were trading 10% higher.

The stock, with just a few million shares available for trading, is one of the most heavily shorted issues on the

Nasdaq Stock Market

. Short-sellers contend that earnings ultimately won't be able to keep pace with the big jump in the price of the company's shares.

More than 80% of the company's stock is owned by its founder and chairman, Ralph Bartel.