Shares of Expedia were up more than 10 percent in after-hours trading after the travel giant reported its fourth quarter earnings, beating profit expectations.
It’s the first earnings report since the abrupt resignation of former CEO Mark Okerstrom and CFO Alan Pickerill on Dec. 4. At the time, Expedia Chairman Barry Diller cited a strategy disagreement between the top executives and the board over efforts to unify the company’s brands and technology.
In a statement as part of the earnings report, Diller and vice chairman Peter Kern cited a focus on core operations and improved efficiency. Diller and Kern took over day-to-day operations after the executive shuffle. Here’s the full statement:
“Since our management change in December we have re-focused the company on our core operations which had suffered for much of 2019. We have rapidly moved to simplify how we operate and increase efficiency. These changes helped us exceed the high-end of our revised guidance range in 2019 and will contribute to accelerated profit growth in our underlying business in 2020.
In addition, we are targeting $300-500 million of run-rate cost savings across our business. We are not providing a specific guidance range given uncertainty on how much cost savings we’ll recognize this year and the full effect of Coronavirus. However, taking these factors into account, we expect 2020 Adjusted EBITDA growth to be in the double-digits. More importantly, the actions we’re taking to simplify our business and drive cost efficiency will position Expedia Group for improved revenue growth and margin expansion for years to come.”
Expedia posted $2.75 billion in revenue, up 7 percent, and earnings per share of $1.24 for the fourth quarter. Analysts expected revenue of $2.76 billion and EPS of $1.19.
The sum of what customers spent across rooms, flights and other travel across Expedia’s brands — known as gross bookings — grew 6 percent to $23.2 billion for the quarter. Domestic gross bookings increased 7 percent and international gross bookings grew 5 percent.
Revenue from vacation home rental platform Vrbo grew 4 percent. The Vrbo segment also includes HomeAway, the Airbnb competitor that Expedia acquired in 2015 for $3.9 billion.
The reorganization effort led by Okerstrom aimed to unify the company’s brands and technology, and help Expedia take better advantage of the larger company’s scale. But Diller said in December that it resulted “in a material loss of focus on our current operations.”
The shakeup came a little more than two years after Okerstrom was named to the CEO role, succeeding Dara Khosrowshahi after he left to become Uber’s top executive.
It also came just two months after Expedia made its long-awaited headquarters move from downtown Bellevue, Wash., to a high-profile Seattle waterfront site.
Diller, the former Paramount Pictures chairman, started the Fox television network and USA Broadcasting. He oversees a wide range of online brands as chairman of the IAC media and internet company. Diller made his first investment in Expedia in 2001 and remains its chairman. He is also a major shareholder.
A report last month indicated the company is in no hurry to find a replacement chief executive.
Expedia stock sank after the company missed earnings expectations in November. Shares have risen since the executive swap in December. The company’s market capitalization is $16 billion.
Expedia is staring down Google as a looming giant in the travel industry. Expedia and a group of travel companies recently asked the EU to investigate Google’s search results practices.