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Expedia's (EXPE) Q3 Earnings May Reflect Egencia Weakness
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Expedia, Inc. (EXPE - Free Report) is set to report third-quarter 2017 results on Oct 26 after the bell. In the quarter, we expect strength in Core OTA, Trivago and Homeway segments to be offset by weakness in the Egencia business.
We observe that shares of Expedia have gained 34.9% year to date, significantly underperforming the industry’s 50.7% rally.
Core OTA
In the second quarter, this segment’s revenues were up 14.7% sequentially and 13.8% year over year to $2 billion. It is expected to perform well in the to-be-reported quarter as Expedia continues to see solid momentum in room night growth in all key regions. The Zacks Consensus Estimate for this segment’s revenue is currently pegged at $2.3 billion.
Trivago
Trivago revenues increased 21.1% sequentially and a massive 63.2% year over year to $328 million. Its stupendous growth is expected to continue in the to-be-reported quarter driven mainly by strong volumes and solid monetization. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at 370 million.
HomeAway
In the second quarter, HomeAway revenues were $224 million, up 9.8% sequentially and 30.2% year over year. The to-be-reported quarter is expected to witness robust growth as well since HomeAway conversion rates are strong and have been increasing year over year. Consistent increase in stayed room night and stayed property night is also expected to contribute to HomeAway’s growth. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $292 million.
Egencia
In the second quarter, Egencia was up 4.8% on a sequential basis and 8% on a year over year basis to $135 million. This segment is however expected to be lumpy and partially offset strong performance of other segments in the to-be-reported quarter due to the impact of the churn of Orbitz for Business customers during last year's migration.
Also, Expedia’s plan to ramp-up sales organization in the Egencia business will impact margins in the near term.The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $123 million.
Expedia has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided especially if they have a negative Earnings ESP.
Stocks to Consider
Here are some stocks that you may want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:
Texas Instruments Incorporated (TXN - Free Report) , with an Earnings ESP of +0.07% and Zacks Rank #2.
Extreme Networks, Inc., (EXTR - Free Report) with an Earnings ESP of +9.75% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Expedia's (EXPE) Q3 Earnings May Reflect Egencia Weakness
Expedia, Inc. (EXPE - Free Report) is set to report third-quarter 2017 results on Oct 26 after the bell. In the quarter, we expect strength in Core OTA, Trivago and Homeway segments to be offset by weakness in the Egencia business.
We observe that shares of Expedia have gained 34.9% year to date, significantly underperforming the industry’s 50.7% rally.
Core OTA
In the second quarter, this segment’s revenues were up 14.7% sequentially and 13.8% year over year to $2 billion. It is expected to perform well in the to-be-reported quarter as Expedia continues to see solid momentum in room night growth in all key regions. The Zacks Consensus Estimate for this segment’s revenue is currently pegged at $2.3 billion.
Trivago
Trivago revenues increased 21.1% sequentially and a massive 63.2% year over year to $328 million. Its stupendous growth is expected to continue in the to-be-reported quarter driven mainly by strong volumes and solid monetization. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at 370 million.
HomeAway
In the second quarter, HomeAway revenues were $224 million, up 9.8% sequentially and 30.2% year over year. The to-be-reported quarter is expected to witness robust growth as well since HomeAway conversion rates are strong and have been increasing year over year. Consistent increase in stayed room night and stayed property night is also expected to contribute to HomeAway’s growth. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $292 million.
Egencia
In the second quarter, Egencia was up 4.8% on a sequential basis and 8% on a year over year basis to $135 million. This segment is however expected to be lumpy and partially offset strong performance of other segments in the to-be-reported quarter due to the impact of the churn of Orbitz for Business customers during last year's migration.
Also, Expedia’s plan to ramp-up sales organization in the Egencia business will impact margins in the near term.The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $123 million.
Expedia, Inc. Revenue (TTM)
Expedia, Inc. Revenue (TTM) | Expedia, Inc. Quote
What Our Model Says
Expedia has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided especially if they have a negative Earnings ESP.
Stocks to Consider
Here are some stocks that you may want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:
Applied Materials, Inc. (AMAT - Free Report) , with an Earnings ESP of +0.37% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Texas Instruments Incorporated (TXN - Free Report) , with an Earnings ESP of +0.07% and Zacks Rank #2.
Extreme Networks, Inc., (EXTR - Free Report) with an Earnings ESP of +9.75% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>