Expedia (NASDAQ:EXPE) stock fell sharply in early trade after the travel company missed analyst estimates despite reporting what it said was its most profitable year ever in 2022, supported by record lodging bookings.
Revenue for the three months to December 31, 2022, increased by 15% to $2.62 billion as gross bookings increased by 17% to $20.5 billion. The company said December bookings were impacted by cold winter weather. Still, full-year 2022 revenue jumped 36% to $11.7 billion on gross bookings of $95 billion, a 31% improvement on FY2021.
Adjusted earnings per share for 4Q came in 19% higher at $1.26, with FY 2022 adjusted EPS more than quadrupling to $6.79.
Consensus estimates from Refinitiv had pencilled in 4Q revenue of $2.7 billion and EPS of $1.67.
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“We were pleased that we were able to deliver our most profitable year in 2022, despite the friction from transforming our business model and technology platform,” Expedia chairman and CEO Peter Kern said in a statement.
“While our 4Q results were negatively impacted by severe weather, demand was otherwise strong and accelerating, and has been markedly stronger since the start of the year,” he added.
The company also noted that free cash flow grew to $2.8 billion over the course of 2022, more than 70% higher than in 2019. It reduced debt by $2.2 billion, resulting in a significant reduction in its leverage, and spent about $500 million on share repurchases.
"We begin ‘23 with record app usage and member counts, led by Expedia US, the first of our brands to deploy new capabilities and marketing strategies,” Kern said.
“This year, we are excited to see these benefits accrue to more of our brands and geographies, driving further growth and margin expansion.”
Expedia's shares had fallen 7.3% to $US109.11 at mid-morning on Friday.
Contact the author at stephen.gunnion@proactiveinvestors.com