What to Watch out for in Expedia Inc (EXPE)’s Earnings?

Expedia Inc (NASDAQ:EXPE) is scheduled to report its 4th quarter 2014 earnings results on February 5th, after the market closes. As Expedia reports its 4Q earnings, there will attention on certain developments in the company and how they could impact the future quarters. One of such developments is Expedia’s recent acquisition of Travelocity. In the coming earnings report, investors should watch out for what the management has to say about the acquisition, especially its specific impact on future earnings.

Expand collection of sites

Wall Street has already weighed in on the acquisition move by Expedia Inc (NASDAQ:EXPE). Analysts have cited that the acquisition of Travelocity will expand Expedia’s collection of travel sites. Expedia is known for its strategy of tapping smaller rivals to boost the performance of its overall brand. The acquisition of Travelocity is a classical case where Expedia has moved to enhance its brand. Expedia is the fifth-largest travel management in the world, and owns sites such as Expedia.com and Hotwire.com.

The other area that Expedia is expected to benefit from its acquisition of Travelocity is that the move enables it to sharpen its competitive edge against larger rivals such as Priceline Group Inc (NASDAQ:PCLN). Travelocity is a well-known brand in North America, and it is expected to boost Expedia’s customer share, lead to better deals and add new hotel inventories.

Wall Street has its stake, but what the management of Expedia Inc (NASDAQ:EXPE) has to say about the acquisition of Travelocity is more important to the investing community.

$280 million cash acquisition

Expedia acquired Travelocity for $280 million in a cash deal. The acquisition came on the back of a partnership between the two travel sites since 2013. Travelocity serves over 20 million travelers every month, mostly in North America.

For the coming earnings, Wall Street expects Expedia Inc (NASDAQ:EXPE) to earn $1.01 per share and report revenue of $1.27 billion. The company earned $1.93 a share and generated $1.71 billion in revenue in the previous quarter. Earnings and revenue topped the consensus estimates in the previous quarter.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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