Orbitz revenue forecast beats estimates as travel bookings rise
(Reuters) – Online travel agency Orbitz Worldwide Inc (OWW.N) forecast current-quarter revenue above analysts’ estimates, helped by a rise in spending on air tickets and hotel bookings in an improving U.S. economy.
Hotel bookings accounted for about a third of the company’s total revenue in the quarter.
The rise was driven mainly by the company’s rewards program, Chief Executive Barney Harford said on a conference call.
Under its rewards program, Orbitz offers discounted hotel bookings if customers also buy air tickets.
Revenue from flight bookings rose 5 percent, while that from vacation packages rose 12 percent.
“It was a good quarter with continued good outlook and they are getting traction with a lot of their loyalty areas,” Benchmark Co analyst Dan Kurnos said.
Rival Expedia Inc (EXPE.O) reported better-than-expected revenue and profit for the second quarter last week as its hotel and flight bookings increased.
Orbitz said it expected revenue of $249 million-$254 million for the quarter ending September.
Analysts on average were expecting $242.3 million, according to Thomson Reuters I/B/E/S.
Orbitz’s net profit rose to $6.9 million, or 6 cents per share, in the quarter ended June 30 from $561,000, or breakeven on a per-share basis, a year earlier.
The year-earlier quarter included a $18.1 million charge related to refinancing debt.
Revenue rose 10 percent to $248.1 million, beating the average analyst estimate of $245.5 million.
Gross bookings for Orbitz, or the dollar value of all travel services purchased, rose 9 percent to $3.40 billion.
Orbitz’s shares were down about 1 percent at $8.97 on the New York Stock Exchange on Thursday afternoon.
The stock had risen more than 26 percent this year to Wednesday’s close.