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The impact of the COVID-19 pandemic has not just caused the share price of Expedia to plunge by up to 8.9% in 2020, it has also caused the firm to reduce costs through job cuts amid other inconveniences.
American online travel shopping company for consumer and small business travel, Expedia Group Inc (NASDAQ: EXPE) has posted strong Q3 earnings amid resurging COVID-19 cases. According to a Bloomberg report on the earnings report released by Expedia, the strong outfit reflects the uptick in travels during the after lockdowns and before the second wave of the pandemic dawned.
Expedia revealed a total revenue of $1.504 billion, a 58% decline from the 2019 figures which stood at $3.558 billion. Despite the sharp drop in revenue as compared to the year-ago figure, the third quarter revenue shows improvement in Expedia’s services, despite the coronavirus concerns.
“Travel demand continued to be significantly impacted by the virus in the third quarter, but the increased travel in the quarter along with progress on our cost initiatives led to improved financial results,” said Chief Executive Officer Peter Kern. “As the last several weeks have demonstrated, the travel industry and the world still face a prolonged and bumpy path to recovery, with increasing Covid-19 cases and uncertainty around vaccine and therapeutic timelines,” added he.
Per the other performances, Expedia reported an improvement in its Room Night Growth which came in at 58% as against the 11% reported in the year-ago period. The company recorded a loss in its Operating Income which stood at 113 million dollars for the quarter ended in September. Expedia reported Adjusted earnings before interest, taxes, depreciation, and amortization of $304 million, down 67% from a year earlier with $912 million. Expedia reported an adjusted loss per share was 22 cents, as against the average analyst estimate of an 84 cent loss.
Expedia Earnings Still Threatened as New Restrictions Loom
The travel industry remains one of the most impacted industries as the coronavirus stirred most world governments to imposed restrictions far back in March 2020. From the halt in travels to the reduction in hotel bookings, businesses offering similar services as Expedia including Tripadvisor Inc (NASDAQ: TRIP), Booking Holdings Inc (NASDAQ: BKNG), and Airbnb to mention a few have all suffered a plunge in earnings as much as Expedia in the past quarters.
The impact of the COVID-19 pandemic has not just caused the share price of Expedia to plunge by up to 8.9% in 2020, it has also caused the firm to reduce costs through job cuts amid other inconveniences. The period of downtime is not over yet as most economies particularly in the European Economic Area are gradually sliding back into lockdowns caused by the resurging cases of COVID-19.
“Expedia carries relatively high exposure to business travel under normal circumstances. We expect these volumes to remain depressed for as long as governments and firms advise against business travel,” said Dan Thomas, leisure sector senior analyst at Third Bridge Group. the third-quarter earnings report from Expedia however shows the firm’s resilience to weather the impending storms ahead.
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