Expedia (EXPE) Q1 2020 earnings

Visitors browse the Expedia screen at the Berlin International Tourism Fair.

Fabrizio Bensch | Retuers

Expedia reported its first quarter earnings after Wednesday’s bell, continuing to show the financial devastation that the coronavirus has on the travel industry.

The shares initially fell on the report, with investors digesting the information before gaining more than 4.5%.

Here’s what the company reported:

  • Loss of $ 1.83 per share
  • Revenue: $ 2.21 billion

The company’s revenues in the first quarter decreased 15% year-over-year, Expedia reported. Expedia’s adjusted net loss was $ 285 million for the quarter, up 545% year-over-year.

Expedia’s hosting revenues decreased 10% in the first quarter, with a 14% drop in overnight stays, which was partially offset by a 5% increase in revenues per night. Airline revenues fell 56%, according to Expedia, thanks to a 41% drop in ticket revenue and a 26% drop in plane tickets sold. Expedia also noted that advertising and media revenues declined 23% in the first quarter.

“The growth in gross bookings in January was positive, as COVID-19 had a modest impact on results, as the virus was largely confined to the Asia-Pacific region,” the company wrote.

“In February, gross bookings decreased year on year as the virus spread, particularly in Europe towards the end of the month. During March, with COVID-19 becoming a global pandemic, including a significant impact on North America, our largest region, cancellations exceeded new bookings and total gross bookings were negative for the month. “

Wall Street had anticipated a loss per share of $ 1.23 on sales of $ 2.20 billion, based on consensus estimates from Refinitiv. However, it is difficult to compare the reported earnings with Expedia’s first-quarter analysts’ estimates, as the Covid-19 pandemic continues to hit global economies and makes the impact of earnings difficult to assess.

Travel has slowed considerably around the world, with governments asking people to stay at home to slow the spread of the virus. Expedia announced last month that it is raising $ 3.2 billion in new capital to strengthen its financial flexibility and liquidity positions during a pandemic.

Expedia CEO Peter Kern spoke about the company’s dependence on performance marketing when calling investors. Prior to the pandemic, Expedia had warned of the effects of low visibility in Google search results. Changes to Google’s search algorithm have reduced its visibility to search results, which has resulted in increased dependence on paid advertising. Expedia and its peers, like Booking Holdings, spend a lot on Google because many travelers search for travel with terms like “flight to London” or “hotel in San Francisco”.

“We have not been disciplined on this,” he said. “We have been chasing unhealthy growth over the years and Google and other performance marketing channels have tried to dissociate us, and we have made some not-so-smart choices along the way.”

Company executives said on a call to investors that it is seeing improvement week after week in all of its sectors, but declined to give specific figures.

This is a developing story. Please check back for updates.

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