Expedia Group (EXPE) reported a 69% dip in earnings for the fourth quarter due to an increase in costs and expenses as well as a rise in provision for income taxes. However, the online travel services provider’s results exceeded analysts’ expectations.
Net income plunged 69% to $17 million or $0.11 per share. Adjusted earnings soared 49% to $1.24 per share.
Revenue grew 10% to $2.56 billion, driven primarily by growth in Brand Expedia and Expedia Partner Solutions. Total gross bookings increased 11% to $21.96 billion, driven primarily by growth in Expedia Partner Solutions and Brand Expedia.
Looking ahead, the company expects to begin moving to the new Seattle headquarters in late 2019 with new construction began in late 2017. The company had spent a total of $290 million from 2016 to 2018. The spending for the headquarters construction is expected to be of $425 million to $475 million in 2019 and $135 million to $185 million in 2020.
For the fourth quarter, as a percentage of total worldwide revenue, lodging accounted for 69%, advertising and media accounted for 9%, air accounted for 8% and all other revenues accounted for the remaining 14%.
Lodging revenue increased 10% as growth in Expedia Partner Solutions, Hotels.com and Brand Expedia drove room nights stayed higher. Air revenue grew 18% driven by higher air tickets sold and a rise in revenue per ticket. Advertising and media revenue rose 9% on continued growth in Expedia Group Media Solutions, which was partly offset by declines at Trivago. Other revenue rose 10% on growth in the travel insurance product.
For the fourth quarter, total stayed lodging room nights increased by 11% and HomeAway stayed property nights grew by 20%. Expedia Group exceeded 1 million properties available on its core lodging platform as of December 31, 2018, including over 370,000 integrated HomeAway listings. Room night growth declined by 360 basis points to 13% from 16% in the prior-year quarter.
In 2018, Expedia Group returned $1.1 billion to shareholders, including repurchasing 7.7 million shares for $903 million and paying $186 million in dividends.
Shares of Expedia Group ended Thursday’s regular session down 0.01% at $127.87 on the Nasdaq. The stock has fallen over 1% in the past year while it has risen over 11% in the past month.