The online travel site cited pressure on its Hotwire discount travel website as it cut its organic growth forecast.
"Results are solid, but keep an eye on slowing growth and pressure on profitability," Pacific Crest Securities analyst Chad Bartley wrote in a Friday research note.
The company has not seen a change in the environment, he added, but indicated that Priceline (his favorite online travel stock) "is having a bigger-than-expected impact on its U.S. business."
The company lowered its 2013 EBITDA guidance (earnings before interest, taxes, depreciation and amortization) by $20 million to $30 million, which amount to 2% to 3% of EBITDA, "to account for weakness at Hotwire due to rental car inventory constraints and competition from Priceline Express Deals," Cowen & Co. analyst Kevin Kopelman wrote in a research note. He estimates that Hotwire accounts for 8% to 10% of Expedia revenue and somewhat more of profit.
The year's EBITDA guidance "remained at 'low double-digit growth,' with the possibility of low-teens growth, as Hotwire shortfalls are expected to be offset by second-half-of-the-year profits from Trivago, in which Expedia acquired a majority stake in March," Kopelman said.
Expedia said in its earnings report that it saw strong growth in the Americas, Europe and Asia-Pacific across most brands.
In Q1, Expedia earned 25 cents a share ex items, down a penny from a year ago, where analysts expected 23 cents. Revenue rose 24% to $1.01 billion, against views for $968 million. Hotels and international demand helped boost gross bookings 16%. The company owns Hotels.com.
Expedia competes in IBD's Leisure-Travel Booking industry group against discounter Priceline, which is the largest by market cap. Expedia is second, followed by Ctrip.com International in China.
The group, up for the year but down from an all-time high touched earlier this month. It's down nearly 3% in the stock market today.
TripAdvisor, which reports its first quarter results on May 7 and is in the Internet-Content industry group, was up a fraction.
Expedia holds an IBD Composite Rating of 94 out of a possible 99, second in its group only to online vacation home rentals marketplace HomeAway, which has a 97. The group ranks No. 119 of 197 that IBD tracks.
source: news.investors.com
