By Anshuman Tripathy
Nov 4 (Reuters) – Online travel firm Expedia Group forecast fourth-quarter revenue largely below Wall Street expectations, as the industry struggles with the Middle East conflict and unrest in Europe, sending its shares down 9% in extended trading.
The downbeat outlook on Wednesday overshadowed a beat on third-quarter results and a raise in annual gross bookings forecast, as steady spending by wealthy consumers aided international travel demand amid persistent inflation.
The company projected fourth-quarter revenue in the range of $3.69 billion to $3.75 billion, with the midpoint below analysts’ estimates of $3.74 billion, according to data compiled by LSEG.
The forecast moderation was due to the US midterm elections and unrest in the EMEA region, Chief Financial Officer Derek Andersen said on a post-earnings call.
Andersen added that events in the Middle East and Europe were disrupting demand and hurting long-haul routes within the regions.
Expedia’s quarterly forecast echoes comments from peer Booking Holdings on travel disruptions to and from the Middle East and the impact of elevated airfares, alongside unrest in certain European cities.
Hotel operators including Hilton and Marriott have also flagged a drag from the Middle East conflict on their fourth-quarter results, along with impact from the elections.
However, the Vrbo parent’s revenue rose about 12% to $4.94 billion for the quarter ended September 30, beating estimates of $4.74 billion. Its third-quarter adjusted profit of $9.39 per share beat Wall Street estimates of $8.89.
CEO Ariane Gorin told Reuters that US customer demand was strong in the quarter in both domestic travel and outbound to Europe and Asia.
In its post-earnings call with analysts, Gorin added that demand was especially strong among the more affluent customers, who prioritized travel despite elevated airfares.
Expedia raised its annual gross bookings forecast to a range of $131.4 billion to $131.9 billion, from $129.5 billion to $130.8 billion earlier.
Analysts on average were expecting annual gross bookings of $130.22 billion.
The Seattle-based company expects annual revenue of $16.37 billion to $16.43 billion, compared with $16.05 billion to $16.22 billion earlier.
(Reporting by Anshuman Tripathy in Bengaluru; Editing by Sriraj Kalluvila and Leroy Leo)
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