Expedia‘s (EXPE) $632 million bet on Trivago paid off again Thursday when the No. 2 online travel agency announced first-quarter results that topped estimates, due in part to the German subsidiary’s 48% year-over-year growth.
Expedia stock bounded as much as 10% Friday before the closing the session up more than 8%, near 116. Shares of No. 1 rival Priceline (PCLN) rose 2%, the day after the company’s chief executive stepped down following an investigation into an at-work relationship.
For the quarter, Expedia reported $1.9 billion in sales, up 39% year over year, and 9 cents adjusted earnings per share, swinging from a 3-cent per-share loss in the year-earlier quarter. Both measures topped analyst views for $1.8 billion revenue and a 6-cent per-share loss.
Credit Suisse analyst Stephen Ju boosted his price target on Expedia stock to 134 from 130 noting the “clean, across-the-board beat.” Ju kept his neutral rating on Expedia stock as he awaits the effect of $3.9 billion acquisition HomeAway.
In total, Expedia spent $6 billion acquiring companies in 2015, Benchmark analyst Daniel Kurnos wrote in a research report. Trivago — which Expedia acquired a majority share in, in 2012 — was a highlight.
Trivago revenue jumped 48% to $176 million and accounted for the second-largest chunk of revenue behind the $1.54 billion, up 32%, achieved in Expedia’s core online travel agency segment. Egencia and HomeAway brought in $110 million and $142 million.
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