News Expedia Misses Earnings Expectations But In Recent Acquisitions, Orbitz And HomeAway, Are Starting To Pay Off

Expedia missed quarterly earnings expectations on Thursday but said its recent acquisitions of Orbitz and vacation rental platform HomeAway have begun to pad its bottom line.

Expedia, the parent of Hotels.com and Travelocity, reported profits of $183 million, or $1.17 per share, in its latest quarter. That missed analyst estimates of $1.36 by a wide margin. However, revenue increased 23% to $2.09 billion, just beating estimates of $2.07 billion.

Shares of the online travel giant ticked down 4% before recovering  to its market close price of $123.3 in after-hours trading.

During the quarter, travelers spent $16.1 billion on bookings (up 8% from the same quarter last year) and stayed 15% longer in the hotel rooms they booked. Investments in mobile have driven part of this growth, with app users returning to the site twice as many times as the average user. Nearly 1 in 3 transactions booked last year occurred on a mobile device and 45% of online traffic was on mobile.

Expedia’s recent history has been marked by a series of acquisitions of big names in travel, including Orbitz Worldwide and vacation rental marketplace HomeAway. These new subsidiaries contributed $764 million and $689 million in revenue, respectively, last fiscal year.

Trivago, which Expedia IPO’d in December and maintains a 65% stake in, finished 2016 strong with revenue increasing 65% from the same quarter the year prior. Trivago’s stock was up 17% to $13 in after-hours trading on Thursday.

Hotels still make up the bulk of Expedia’s business and accounted for 61% of worldwide revenue last year. Yet, its packages and tours arm has been growing quickly, up 35% in bookings. This was followed by flights and car reservations, which  grew in bookings 32% and 30% last year, respectively.

Expedia is the largest online travel company by bookings and accounts for 13% of the total U.S. travel market. It has operations in Europe, Asia and Latin America and competes mainly with Priceline and TripAdvisor.

The company shelled out $436 million for four million shares last year as part of its buyback program.