Expedia stock falls sharply on earnings, names new CEO
Shares of Expedia Group (EXPE) fell in after-hours trading. The travel company reported adjusted earnings per share of $1.72 compared to a $1.69 estimate. Revenue of $2.89 billion was in line with expectations. However, gross bookings fell short of expectations. The company also announced Ariane Gorin will be its new CEO effective May 13, with current CEO Peter Kern to serve as Vice Chair of the company's board
Yahoo Finance's Julie Hyman and Josh Lipton break down the report.
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Editor's note: This article was written by Stephanie Mikulich.
Video Transcript
JULIE HYMAN: Let's talk about Expedia. That company just coming out with its numbers here and the shares down a quick 11% in after hours trading. Let's run through the numbers here.
Adjusted EBITDA in the fourth quarter $532 million. That was ahead of the $526.8 million that analysts had been anticipating. Revenue beating estimates by a hair here. Adjusted earnings per share beating estimates.
The one area of weakness here looks to be gross bookings, which is an important measure for the likes of Expedia. $21.67 billion. $22 billion is what analysts had been anticipating from Expedia.
And there's another important piece of news to mention for Expedia, it is laying out a CEO transition plan here. Peter Kern, who has been the CEO of Expedia only since to 2020, will be stepping down after he completes his contract year. As of May 13, Ariane Gorin will become the CEO. She has already been at Expedia since 2013. Most recently, she was the president of Expedia for business. So Ariane Gorin going to be taking over from Peter Kern as of May 13 at Expedia. What stands out to you here from--
JOSH LIPTON: Yeah, it's interesting.
JULIE HYMAN: --the story.
JOSH LIPTON: I mean, the reaction in the after hours is pretty tough.
JULIE HYMAN: Yeah.
JOSH LIPTON: And the stock, though, has been working over the past 12 months. I mean it's up around 30%. Interesting change in the c-suite. Barry Diller, by the way, who is, of course, Expedia's group chairman weighing in saying Ariane Gorin, calls her a superb executive, said they very much wanted an internal candidate. It sounds like they've got one.
Said they did do a comprehensive search, but the board determined that she was the best candidate in their opinion just given her leadership. And she has been there a while and she's a real veteran. She's been at the company it sounds like some 10 years at this point.
JULIE HYMAN: Yeah, I'm looking at some of the other metrics just real quickly here. Booked room nights up 9%, but operating income down 19% year over year in the fourth quarter.
JOSH LIPTON: At least initially investors not happy in the after-hours.
