Expedia Inc, the world's largest online travel services company by bookings, posted a surprise quarterly profit as a string of acquisitions helped boost revenue. Shares of the company, which also beat revenue expectations, rose 11.7 percent to $119.50 in after-market trading on Thursday.
Expedia last year embarked on an acquisition spree, buying its rival Orbitz Worldwide Inc for $1.3 billion and Travelocity for $280 million. The company also moved to ramp up competition with apartment-sharing startup Airbnb by purchasing vacation rental site HomeAway Inc for $3.9 billion, its biggest acquisition. Expedia plans to push HomeAway, which has primarily marketed beach and ski rentals, into cities such as Paris and San Francisco where Airbnb holds sway.
"The type of activity that we did last year was unprecedented (and is) unlikely that it would be repeated in 2016," Chief Financial Officer Mark Okerstrom told Reuters in an interview. However, the company was certainly not closed for business from M&A, he added. Acquisitions added about 28 percentage points to revenue growth in the first quarter ended March 31, the company said.
Revenue rose about 39 percent to $1.90 billion, ahead of the average analyst estimate of $1.84 billion, according to Thomson Reuters I/B/E/S. Despite a strong first quarter, the company expects vast majority of adjusted EBITDA dollar growth to come in the back half of the year, CFO Okerstrom said on a post-earnings conference call.