Expedia CEO resigns, shares slump on air travel softness
By Nathan Gomes and Doyinsola Oladipo
(Reuters) - Expedia on Thursday warned that revenue in 2024 would moderate as air ticket prices drop, and said CEO Peter Kern was stepping down and would be succeeded by an insider.
The company's shares, which have gained over 60% since November, slid more than 12% in extended trading and dragged down those of peers Booking Holdings and Airbnb after Expedia sounded some concern about moderating bookings.
Revenue from air travel was under pressure from a fall in average ticket prices, Chief Financial Officer Julie Whalen said on a post-earnings call.
The grounding of Boeing's 737 Max 9 fleet - after a panel flew off midair from one of its planes last month - was also weighing on bookings, she added.
"Discussion of some air softness and travel demand moderation is probably also contributing to the after-hours action, as is the fact that shares are up a lot into the print," Morningstar analyst Dan Wasiolek said.
The moderation in travel demand was not surprising after a strong recovery, which was echoed by hotel chain Hilton on its earnings call this week, the analyst said.
The company expects gross bookings growth in the first quarter to be in the low- to mid-single digits and revenue growth to be in the mid-single digits.
"On a macro level, we expect travel demand to remain relatively healthy, but we expect growth rates across the world to decelerate," Kern said on the call.
The outgoing CEO, who has led the company for four years, will continue to serve as Expedia's vice chairman and member of the board, working closely with his successor, Ariane Gorin, to ensure a smooth transition, the company said.
Gorin, who has been with the travel firm for over a decade, was most recently president of Expedia for Business, where she led global supply partner group, advertising business and B2B partner network.
She will receive an annual base salary of $1.25 million and a one-time relocation payment of $100,000.
Gorin, who was also an executive at Microsoft between 2003 and 2013, will take the helm of the online travel firm on May 13.
The company also beat estimates for fourth-quarter profit and sales, driven by steady demand for travel in the United States.
Its gross bookings, which grew 6% from a year earlier, were impacted by the Middle East crisis at the beginning of the quarter.
It earned $1.72 per share on an adjusted basis, ahead of analysts' estimates of $1.68 per share, according to LSEG data.
Fourth-quarter sales rose 10% to $2.89 billion, edging past estimates of $2.88 billion.
(Reporting by Nathan Gomes in Bengaluru and Doyinsola Oladipo in New York; Editing by Anil D'Silva)
