You know things have been rough for a company when quarterly revenue plummets 58% from the prior year, taking the business from a $409 million profit to a loss of $221 million, and the trend is seen as relatively good news.
Those are some of the key trends in Expedia Group’s financial report for the September quarter, released Wednesday afternoon. The results reflect what CEO Peter Kern called “basically a stabilization” of the global travel market, which has been decimated by COVID-19 lockdowns and travel restrictions.
Shares of Expedia Group are up more than 5% in after-hours trading.
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“We obviously can’t control what’s going on out there in the travel market or in the scientific community,” Kern said on a conference call with analysts and investors. “We are hoping for all the same things you are in terms of vaccines and other treatments that will help us get through this. We do believe that people have been, up until recently, getting increasingly comfortable with the idea of traveling.”
Elaborating on those recent trends, Kern noted that the “third wave” of the pandemic in the US and elsewhere is having an impact, saying the travel market “will remain bumpy and unpredictable” amid the pandemic.
The Seattle-based online travel giant’s revenue of $1.5 billion in the quarter compared to $3.56 billion the year before. Its quarterly loss was 22 cents/share, down from a profit of $3.38/share a year ago. Both measures exceeded the expectations of Wall Street analysts, who expected revenue of $1.38 billion and a loss of 79 cents on average.
Expedia Group, based in Seattle, includes travel brands such as vrbo, Orbitz, Hotwire, Trivago, Hotels.com, and Egencia in addition to the flagship Expedia.com. Kern, a longtime Expedia Group board member, has been CEO since April.
For the September quarter, revenue in Expedia Group’s Retail segment was down 52% to $1.25 billion, boosted in part by growth of Vrbo, the company’s alternative accommodations brand, which competes against Airbnb and others.
Revenue fell by 72% to $203 million in the company’s business-to-business segment, “impacted by the slower recovery for corporate travel demand,” the company said in its earnings report. Total gross bookings were down 68% to $8.6 billion for the quarter, below the $9.9 billion expected by Wall Street.
Expedia Group has been cutting costs in part by reducing its workforce, recently making an unspecified number cuts in its Travel Partners Group, following a larger reduction of 12% of its workforce earlier this year, impacting about 3,000 jobs at the time. The company is also consolidating its data and tech platforms across its brands in an effort to streamline its operations.