Expedia Posts First Quarterly Profit

Expedia Inc. posted its first quarterly operating profit a year ahead of plan, and said earnings for the current quarter and next fiscal year would top Wall Street expectations as the online travel service drew more customers.

For its current fourth quarter, ending June 30, Expedia said it expected to post a profit, before items, of 6 cents to 9 cents per share, compared with a loss of 30 cents a year earlier. The consensus estimate of Wall Street analysts was for a fourth-quarter loss of 3 cents a share.

For its 2002 fiscal year, Expedia said profit would be 30 cents to 40 cents per share, far above the First Call consensus of a profit of 13 cents per share.

But the Bellevue, Wash.-based company tempered the estimates with a note of caution about the U.S. economic slowdown and the competitive landscape.

Shares in Expedia rose $2.46 to close at $26.01 on regular Nasdaq trading, but ticked up to $27.01 in after-hours trading shortly after the earnings were released.

Expedia, which is 70% owned by software giant Microsoft Corp., has stood in contrast to many other Internet companies, which have slashed payrolls and spending as they strain to reach profitability.

Expedia said that for its fiscal third quarter, ended March 31, pro forma earnings before noncash items came in at $4.4 million, or 9 cents per basic share, compared with a loss of $21.4 million, or 50 cents, a year earlier. That was in line with what the company forecast two weeks ago, and above the then-consensus Wall Street estimate of a loss of 13 cents a share.

Revenue rose 88% to $110.2 million.