Orbitz shares fall on outlook, as 3Q misses views
CHICAGO (AP) — Shares of online travel agency Orbitz Worldwide Inc. plunged Wednesday after the online travel company again cut its outlook for the year and reported third-quarter results short of expectations.
The Chicago company earned $148.8 million, or 14 cents per share in the summer quarter, up 32 percent compared with $11.2 million, or 11 cents per share, a year earlier. Adjusted earnings before taxes and other one-time items fell 2 percent. Revenue fell 2 percent to $198.3 million.
Analysts polled by FactSet expected earnings, including one-time items, of 7 cents per share and revenue of $200.9 million.
Orbitz said its bookings fell 7 percent on fewer airline ticket reservations. That was partially offset by improvements in vacation package and hotel bookings. More expensive airline tickets and hotel rooms helped, too, since Orbitz gets a commission on every sale based on the price.
Orbitz saw weakness in its core U.S. business, and the economic slowdown in Europe hit its hotel business based in the U.K.
For the fourth-quarter, the company expects better results, but below Wall Street's expectations. Adjusted earnings — stripping out taxes, interest and other items — are estimated at $32 million to $37 million, compared with $30.1 million a year earlier. The outlook for revenue is $183 million to $189 million, compared with $177.1 million a year earlier.
Analysts forecast adjusted earnings of $39.9 million on revenue of $191.1 million.
For the year Orbitz expects adjusted earnings of $124.5 million to $129.5 million and revenue of $772 million to $778 million. That's down from its forecast three months ago. Analysts expect adjusted earnings of $126.3 million on revenue of $783 million for the year.
Also Wednesday, Orbitz said it found a new chief financial officer, Mitch Marcus. He was most recently a senior vice president at Sara Lee. The appointment ends a search that started this spring with the departure of Russ Hammer. He'd been in the post for little more than a year. David Belmont, Orbitz group vice president of financial planning and analysis, has served in the CFO role since June.
Orbitz shares fell 20 cents, or 7.7 percent, to $2.40 in midday trading amid a broad market sell-off. The stock has ranged from $2.07 to $4.75 in the past 52 weeks.