Expedia's 3Q profit up 23 pct as bookings rise

BELLEVUE, Wash. (AP) - Bookings are up at online travel company Expedia Inc., although prices for flights and hotels continued softening.

The company said Thursday its third-quarter profit rose 23 percent with the rise in sales, which points to better days ahead for the travel industry, hurt as consumers and businesses limit their spending during the recession.

The company said it earned $117 million, or 40 cents a share, in the three-month period that ended Sept. 30. That's up from $94.8 million, or 33 cents a share, a year earlier.

Excluding one-time items, the company earned 48 cents a share in the period.

Analysts polled by Thomson Reuters expected 43 cents a share. Analysts typically exclude one-time items from their estimates.

Shares rose some 4 percent when trading opened, but fell back slightly. Shares were down 12 cents to $24.22 in morning trading Thursday.

Revenue rose 2 percent to $852.4 million, above analyst estimates of $828.9 million.

Domestic revenue fell 2 percent while international rose 10 percent. The company, which operates sites such as hotels.com and its namesake site, said gross bookings rose 9 percent from the prior year, with a 26 percent increase in transactions.

Those bumps were offset by lower airfares and hotel rates. The travel slump caused airlines, hotel operators and others in the travel industry to lower their prices to compete.

Expedia, too, has been cutting its fees. CEO Dara Khosrowshahi said it appears to be working.

"Travelers are clearly responding to our improving value proposition, as we broaden our fee cuts and increase the depth and breadth of our global supply," Khosrowshahi said.

Worldwide air revenue fell 8 percent in the quarter even as ticket volumes rose 27 percent. That's because revenue per ticket fell 28 percent.

Global hotel revenue rose 3 percent as the company saw a 27 percent increase in room nights stayed. That was dampened partly by a 19 percent drop in room rates.

Advertising and media revenue rose 5 percent in the quarter and accounted for 10 percent of Expedia's worldwide revenue.