(Bloomberg) — Expedia Group Inc. reported earnings that were better than analysts expected, reflecting an uptick in summer travel before Covid-19 cases began surging again, and the benefits of cost cuts earlier this year.
Revenue fell 58% to $1.5 billion — the third consecutive quarterly contraction — for the three months ended Sept. 30, the Seattle-based online travel giant said in a statement Wednesday. Analysts had projected $1.39 billion, according to data compiled by Bloomberg. Gross bookings were $8.6 billion, down 68% compared with a year earlier but an improvement from the previous quarter’s 90% drop.
Expedia withdrew its full-year forecast in March when lockdowns halted flights and travel globally. The pandemic hit at an already turbulent time for Expedia, which cut 3,000 jobs in February. Home-rental unit Vrbo, which competes with Airbnb Inc., has weathered the pandemic relatively better, benefiting from demand for long-term stays in rural locales as people sought respite from virus hot-spots in cities and took advantage of work-from-home flexibility.
“Travel demand continued to be significantly impacted by the virus in the third quarter, but the increased travel in the quarter along with progress on our cost initiatives led to improved financial results,” said Chief Executive Officer Peter Kern, who took over in April. “As the last several weeks have demonstrated, the travel industry and the world still face a prolonged and bumpy path to recovery, with increasing COVID-19 cases and uncertainty around vaccine and therapeutic timelines.”
Surging virus cases in the U.S. and Europe could derail Expedia’s recovery due to its dependence on hotels, airlines and corporate customers. Some experts predict this second, winter wave could be worse than the first.
“Expedia carries relatively high exposure to business travel under normal circumstances. We expect these volumes to remain depressed for as long as governments and firms advise against business travel,” said Dan Thomas, leisure sector senior analyst at Third Bridge Group.
The pandemic-induced travel lull has been indiscriminate across the industry and Expedia’s competitors have not been unscathed. TripAdvisor Inc. and Airbnb eliminated about a quarter of their workforce, and Booking Holdings Inc. was forced to apply for government aid.
Adjusted earnings before interest, taxes, depreciation and amortization were $304 million, down 67% from a year earlier. The adjusted loss per share was 22 cents, beating the average analyst estimate of an 84 cent loss.
The shares gained about 4% in extended trading in New York after closing at $98.50.
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