Worries For Kayak, But Travel Market Holding Steady

A travel study conducted by Trip Advisor on more than 2,700 U.S. travelers revealed that 31% of U.S. travelers will spend more on travel in 2012 than in the current year. Forty-nine percent of those surveyed are expected to keep their travel spending constant during the two-year period. The optimism in travel spending is reflected in the online travel players’ results.

Expedia’s Financials
Expedia’s Q3 revenues grew 15% to $1.14 billion, falling short of the market’s expected $1.16 billion. EPS of $0.77 was ahead of the market’s target of $0.73.

Domestic revenues accounted for 56% of the quarter’s revenues and grew 8% over the year. International revenues recorded strong growth of 15% over the year.

Expedia’s International Expansion
Expedia continued with their international expansion and tied up with Ireland’s national carrier, Aer Lingus. Consumers booking flights at Aer Lingus’ website now have exclusive booking access to Expedia’s more than 140,000 hotels and travel packages worldwide.

Expedia’s Groupon Partnership
A quarter ago, Expedia tied up with Groupon to offer travel deals to Groupon subscribers. Within three days of launch, Expedia sold 15,000 travel deals. Recently though, the management has suggested that it is no longer confident of the long-term value of sales made through Groupon. They are questioning the loyalty of customers won through Groupon deals.

Their stock is trading at $27.47 with a market capitalization of $7.4 billion. It touched a 52-week high of $32.89 in of July this year.

Orbitz’s Financials
Orbitz’s (NASDAQ:OWW) Q3 revenues grew 4% over the year to $202.9 million, but managed to exceed market expectations of $198.4 million. EPS fell from $0.15 earned a year ago to $0.11,  but was ahead of the market’s targeted $0.06.

For the current quarter, Orbitz is projecting revenues of $170 million-$174 million. The Street was looking for revenues of $177.5 million. They expect to end the year with revenues of $760 million-$764 million, compared with the market’s target of $762.6 million.

Orbitz’s Expanding Offerings
Orbitz recently launched ExpenseAnywhere, an expense management and reporting tool that integrates with the Orbitz for Business booking tool and credit card data to give their customers a complete and automated expense management solution.  ExpenseAnywhere’s capabilities include pre-travel authorization with expense approval management; integration with back-end ERP systems; for corporate credit cards, travel credit cards, and personal credit cards, receipt imaging; and enabling mobile apps for Android, iPhone, and BlackBerry.

The stock is trading at $2.95 with a market capitalization of $304.85 million. It touched a 52-week high of $6.50 in December of last year.

Priceline’s Financials
Priceline’s (NASDAQ:PCLN) Q3 revenues grew 45% over the year to $1.45 billion with EPS of $9.95. The Street was looking for revenues of $1.42 billion with earnings of $9.30 per share.

International sales grew 79% over the year to $953 million and accounted for 66% of the quarter’s revenues. A year ago, international revenues constituted 56% of the company’s quarterly revenues.

For the current quarter, Priceline expects revenues to grow 27%-32% over the year to $928.75 million-$965.3 million with EPS of $4.90-$5.00. The market was projecting revenue growth of 36% with earnings of $5.13.

Priceline’s stock is trading at $528.36 with a market capitalization of $26.3 billion. It touched a ten-year high of $561.88 this past June.

Kayak’s Financials
Kayak filed for an IPO in November 2010 to raise $50 million in funding. But the depressed stock market conditions seem to have put Kayak’s IPO on hold. For the six months ended June of this year, Kayak reported revenues of $109.43 million, ahead of the previous year’s $80.47 million. However, they reported a loss of $3.1 million in the quarter compared with earnings of $2.5 million a year ago.

Kayak’s Competition
In addition to the market conditions, Kayak is worried about competition from Google’s ITA acquisition. They recently amended their SEC filing to include Google’s entry into the travel market and view the acquisition as a big threat to their business. Kayak is concerned that Google may not offer ITA’s services at prices that allow them to keep their business competitive.