CHICAGO, May 2, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: Expedia Inc. (Nasdaq: EXPE),
Priceline.com (Nasdaq: PCLN), Orbitz
Worldwide (NYSE: OWW), Google Inc (Nasdaq: GOOG)
and OfficeMax Inc. (NYSE: OMX).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Get the most recent insight from Zacks Equity Research with the
free Profit from the Pros newsletter:
http://at.zacks.com/?id=5513
Here are highlights from Friday's Analyst Blog:
Expedia Sees Markets Expanding
Expedia Inc.'s (Nasdaq: EXPE) first quarter earnings were
in line with the Zacks Consensus Estimate, although revenues
exceeded by 2.9%. The strength in revenues helped offset higher
opex and was complemented by a lower tax rate.
Expedia beat the Zacks Consensus by an average 3.9% in the
preceding four quarters, so it is not surprising that the tepid
performance met with limited enthusiasm from investors (shares were
up just 0.08% in after-market trading).
Revenue
Revenue for the quarter was $822.2
million, up 1.7% sequentially and 14.5% year over year.
International growth, higher room night volumes and a strong media
business were the highlights of Expedia's revenue performance.
This strength was partially offset by weakness in air ticket
sales.
Revenue by Segment
Specifically, leisure customers remained the largest revenue
contributors, generating over 78% of revenue. Corporate customers
(Egencia) were under 5%, while TripAdvisor brought in the remaining
17%. Sequential comparisons were mixed at -1.9%, 7.7% and 38.3%,
respectively for the three categories. The segments were up 11.9%,
29.8% and 23.5%, respectively from the year-ago quarter.
While the leisure segment is the largest and most important for
Expedia, it is clear that the company is gaining ground in the
Egencia (corporate) segment. Expedia stated that corporate spending
on travel is on the recovery path.
While the company's superior technology platform is partially
responsible for the increase in new signings, it is also apparent
that companies that had curtailed business spending during the
downturn were raising their travel budgets in order to drive sales.
These two factors are helping Expedia take market share in
the corporate segment.
Additionally, the cost of travel continues to escalate,
converting into higher revenues for Expedia. Egencia has increased
at a double-digit year-over-year clip in each of the last six
quarters and growth rates appear sustainable.
The increase from the year-ago quarter in both Leisure and
TripAdvisor are also encouraging. However, while Expedia stated
that it was gaining share in lodging, we think this is possible,
mainly because online bookings are growing strongly at the expense
of offline bookings and something that Expedia would gain from.
With a stronger outlook for both leisure and corporate travel,
advertisers are also coming. TripAdvisor, did exceptionally well in
the last quarter, recording 25% growth in CPC-based revenue, 30%
growth in click volume, 10%+ growth in display advertising revenue
and over 300% growth in other revenue (business llistings).
Third-part revenue was up 32%. TripAdvisor has grown very
rapidly over the last six quarters, with triple-digit
year-over-year growth in two of these quarters and high
double-digits in the rest.
Our Take
Expedia is seeing renewed strength in both domestic and
international markets and the secular drivers of the company's
business remain strong. The travel market all over the world is in
a growth phase, especially the online segment, which is also
gaining from the shift in booking preferences from offline to
online.
Aside from a stronger domestic market, Expedia is taking share
in Europe and has tremendous
growth opportunities in the Asia/Pacific market, where online penetration
is still low. The company has responded by steadily increasing its
hotel inventory and revamping its technology platform, which should
improve conversion rates going forward.
Additionally, ADRs are also on an upward trend, so profitability
may be expected to improve.
That said, the company will continue to face challenges from
players like Priceline.com (Nasdaq:
PCLN), Orbitz Worldwide (NYSE: OWW) and
Travelocity, as well as a growing number of local Chinese players
that could make expansion in the fast-growing Chinese market
difficult. Additionally, Google Inc's (Nasdaq: GOOG)
venture into the travel market is expected to increase costs for
Expedia.
The TripAdvisor spin-off is a positive in this respect, although
Expedia stands to lose the advertising hedge it has enjoyed thus
far. Competition aside, Expedia and other online travel agents
continue to fight occupancy taxes, which remains a hotly debated
and contested issue today.
We have a Zacks #2 Rank on Expedia shares, which translates to a
short-term Buy rating.
OfficeMax Misses on Bottom Line
OfficeMax Inc. (NYSE: OMX) recently posted
lower-than-expected first-quarter 2011 results. The quarterly
earnings of 13 cents a share missed
the Zacks Consensus Estimate of 27
cents, and dropped more than 50% from 39 cents earned in the year-ago quarter. The
company in order to check the fall in the bottom-line hinted at
taking cost-effective measures.
Behind the Headline
Total sales fell 2.8% to $1,863
million from the same-quarter last year but came ahead of
the Zacks Consensus Estimate of $1,855
million. The drop in top-line was attributable to lower
spending by Contract customers and sluggishness seen in traffic
counts in stores.
The office supplies retailer now expects second-quarter 2011
sales to be approximately flat versus the comparable period, and
reaffirms fiscal 2011 sales to remain flat or marginally higher
than 2010. Both include the positive impact of foreign currency
translation.
The recovery in the economy still lacks luster. As a result,
consumers and small businesses still remain wary on their spending.
The demand for office products is closely tied to the health of the
economy.
OfficeMax notified that gross profit dipped 6.1% to $474.5 million, whereas gross margin contracted
90 basis points to 25.5%. Adjusted operating income for the quarter
dropped 55% to $28.6 million, whereas
adjusted operating margin shriveled 180 basis points to 1.5%.
Want more from Zacks Equity Research? Subscribe to the free
Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and
qualitative analysis to help investors know what stocks to buy and
which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly
traded stocks. Our analysts are organized by industry which gives
them keen insights to developments that affect company profits and
stock performance. Recommendations and target prices are six-month
time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides
highlights of the latest analysis from Zacks Equity Research.
Subscribe to this free newsletter today:
http://at.zacks.com/?id=5517
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc.,
which was formed in 1978 by Leon
Zacks. As a PhD from MIT Len knew he could find patterns in
stock market data that would lead to superior investment results.
Amongst his many accomplishments was the formation of his
proprietary stock picking system; the Zacks Rank, which continues
to outperform the market by nearly a 3 to 1 margin. The best way to
unlock the profitable stock recommendations and market insights of
Zacks Investment Research is through our free daily email
newsletter; Profit from the Pros. In short, it's your steady flow
of Profitable ideas GUARANTEED to be worth your time! Register for
your free subscription to Profit from the Pros at
http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the
performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook:
http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before
making any investments. Nothing herein should be construed as an
offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.