Expedia shares sink after 2024 revenue warning on softening air fares (updated)

trivago NV

09/02/2024 15:29

(Updates shares, adds graphic)
    By Pratyush Thakur
       Feb 9 (Reuters) - 
    Shares of Expedia Group  EXPE.O  plunged 19% in early
trading on Friday after the online travel firm said it expects
2024 revenue growth rates to moderate, as air fares soften from
post-pandemic highs.
    The company late on Thursday also said Chief Executive
Officer Peter Kern will step down from his position and will be
replaced by company insider Ariane Gorin.
        Expedia's shares were set to snap a four-day winning
streak and were on course for their biggest single-day drop in
nearly four years, if the losses held.
  
    Booking Holdings  BKNG.O , Tripadvisor  TRIP.O , and Airbnb
 ABNB.O  were down between 1% and 4% in early trading on
amplified concerns about moderating booking and uneven domestic
travel demand following a rebound from pandemic lows.
    On Thursday, Expedia warned that air travel revenue was
under pressure due to a fall in average ticket prices.
    "On a macro level, we expect travel demand to remain
relatively healthy, but we expect growth rates across the world
to decelerate," outgoing CEO Kern said on the company's earnings
call.
    Air travel revenue was also affected by the grounding of
Boeing's 737 Max 9 fleet, leading to multiple cancellations
impacting its Vrbo brand.
    "Overall, we see an 'acceleration story' that is
decelerating with a CEO transition now in play; near-term setup
looks challenging," Wells Fargo analysts wrote in a note.
    The company forecast its gross bookings growth for the
current quarter to be in the low- to mid-single digits range and
said it expects revenue growth to be in the mid-single digit.
    "Expedia's first-quarter guidance may have underwhelmed
investors, with revenue growth expected to be in the mid-single
digits range compared to the 9% consensus estimate," CFRA
analyst Siye Desta said.
    However, the company reported a better-than-expected
adjusted profit of $1.72 per share on the back of resilient
demand during the holiday season. Analysts on average had
expected a profit of $1.68 per share, according to LSEG data.
    Shares of Expedia trade about 12.35 times their forward
profit estimates, well below rival Booking's 21.04 multiple.

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Expedia stock has trailed behind rival Booking Holdings in the
past year    https://reut.rs/3ST5uyc
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 (Reporting by Pratyush Thakur in Bengaluru; Editing by Maju
Samuel)
 ((pratyush.thakur@thomsonreuters.com;))