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(Adds 2011 forecasts in sixth paragraph.)
July 27 (Bloomberg) -- HomeAway Inc., the online vacation- rental service that first sold shares to the public last month, said second-quarter profit fell 85 percent as the company boosted spending to promote its services globally.
Net income fell to $2.2 million from $14.9 million a year earlier, the Austin, Texas-based company said today in a statement. Sales rose 41 percent to $58.7 million from $41.6 million.
Founded in 2005, HomeAway owns 31 websites and operates in 145 countries. Property owners and managers pay to list vacation rentals on HomeAway.com, which travelers can peruse without charge. Sales and marketing costs rose 49 percent to $20.6 million from $13.8 million a year earlier, and the company expanded in the Asia-Pacific region through the acquisition of Australia’s realholidays.com.au.
“During the quarter, we continued to invest in our network of online vacation rental listing websites through new product launches, ongoing network improvements and strategic acquisitions,” Chief Executive Officer Brian Sharples said in the statement.
HomeAway fell 16 cents to $42.77 on the Nasdaq Stock Market today. The shares have soared 58 percent since they started trading on June 29, giving HomeAway a market value of about $3.4 billion.
Revenue this year will increase at least 33 percent to between $224 million and $226 million from $167.9 million in 2010, HomeAway said. The company expects adjusted earnings to $62 million to $63 million.
While HomeAway’s business is growing, the company faces competition from Airbnb Inc., the website that lets home owners turn extra bedrooms into vacation rentals. The San Francisco- based company said this week that it raised $112 million in a funding round led by venture capital firm Andreessen Horowitz. That valued the company at $1.3 billion, according to a person familiar with the matter.
--Editors: Lisa Rapaport, James Callan
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