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Expedia Group's (EXPE) to Post Q3 Earnings: What's in Store?

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Expedia Group, Inc. (EXPE - Free Report) is scheduled to report third-quarter 2019 results on Nov 6.

The company surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive earnings surprise of 15.04%.

Q3 Expectations

For third-quarter 2019, the Zacks Consensus Estimate for revenues is pegged at $3.58 billion.

Further, the consensus market for earnings per share is projected at $3.85.

Past-Quarter Performance

In the second quarter, Expedia reported adjusted earnings of $1.77 per share, the positive earnings surprise being 4.12%. The figure surged 28.3% on a year-over-year basis.

Revenues improved 9.5% year over year to $3.15 billion. Notably, the figure outpaced the Zacks Consensus Estimate of $3.13 billion.

Let’s see how things are shaping up prior to this announcement.

Expedia Group, Inc. Price and EPS Surprise

 

Expedia Group, Inc. Price and EPS Surprise

Expedia Group, Inc. price-eps-surprise | Expedia Group, Inc. Quote

Factors at Play

Expedia’s strength across Core OTA, Vrbo and Egencia is likely to have positively impacted the third-quarter results.

Core OTA: Growing stayed room night number and strengthening lodging business owing to expansion of the company’s global lodging portfolio are likely to have continued in the third quarter. This is likely to have driven the top line in the third quarter.

Further, Expedia’s constant push toward targeted supply acquisition, strategic marketing investments, relevant local content and product innovation are likely to have benefited the segment’s performance in the quarter under review.

The Zacks Consensus Estimate for the segment’s revenues is currently pegged at $2.78 billion, up 10.2% compared with the year-ago actual figure.

Vrbo: Increasing online bookable listings and stayed property nights are expected to have driven the segment’s revenue acceleration in the to-be-reported quarter. Further, growing opportunities in the alternative accommodation space is expected to have benefited the segment in the third quarter.

The Zacks Consensus Estimate for revenues in Vrbo is pegged at $464 million, up 13.2% from the year-ago quarter.

Egencia: ML enabled features are anticipated to have enhanced customer experience in the third quarter. Further, robust cost management strategies are expected to have benefited the segment in the third quarter.

The Zacks Consensus Estimate for the segment’s revenues is pegged at $148 million, up 6.5% from the prior-year quarter.

However, weakness in its trivago segment is expected to have hurt its performance in the quarter under review. Unfavorable changes in marketplaces served by the company are anticipated to have negatively impacted the third-quarter revenues.

The Zacks Consensus Estimate for trivago’s revenues is pegged at $286 million, down 3.1% from the year-ago reported figure.

Further, rising competition in the online travel space from Booking Holdings and MakeMyTrip among others is anticipated to have negatively impacted Expedia’s performance in the third quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Expedia this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Expedia has an Earnings ESP of -1.12% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are a few stocks that you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Activision Blizzard, Inc (ATVI - Free Report) has an Earnings ESP of +24.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eyenovia, Inc. (EYEN - Free Report) has an Earnings ESP of +10.51% and a Zacks Rank #2.

iHeartMedia, Inc. (IHRT - Free Report) has an Earnings ESP of +3.17% and a Zacks Rank #2.

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