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The Associated Press July 29, 2011, 11:50AM ET

Expedia shares hit multi-year high after 2Q report

Shares of travel website operator Expedia Inc. hit a multi-year high Friday after its second-quarter results beat expectations and the company raised its forecast.

THE SPARK: Late Thursday, Expedia said net income in the three months through June 30 came to $140.4 million, or 50 cents per share. Excluding stock-based compensation costs and other items, earnings per share amounted to 55 cents, beating the 49 cents that analysts polled by FactSet expected, on average.

Revenue grew 23 percent to $1.02 billion, exceeding the analyst forecast at $965 million.

THE OUTLOOK: Executives said they now expect operating earnings to rise by a "mid-to-high single digit" percentage from last year, a slightly more optimistic phrase than the previous forecast of a "mid-single digit or better" increase.

THE ANALYSIS: Analyst Naved Khan at Jefferies & Co. sees the planned fourth-quarter spin-off of the travel review site TripAdvisor as one reason to be positive on the stock in the near term. He raised his price target on the stock to $35 from $31 and kept a "Buy" rating on the shares.

Mark Mahaney at Citigroup said Expedia appears to be maintaining its U.S. market share and is "fully participating" in the growth of online hotel bookings internationally. He raised his price target to $36 from $33 and kept his "Buy" rating.

SHARE ACTION: Expedia share were up $3.80, or 13 percent, at $32.80 in midday trading after rising to a high of $32.89 -- their highest level since 2007.

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