Boston, MA 05/05/2014 (wallstreetpr) – The global online travel company Orbitz Worldwide, Inc. (NYSE:OWW) announced swinging to a loss in Q12014 but reported revenue held up nicely in the quarter. The company also issued what it considered a valid reason it had to report a loss in the quarter even though Wall Street was expecting something better.
The company provides technology that helps business and leisure travelers to find, plan and book a wide range of travel services and products. The company operates Orbitz, CheapTickets and some ebookers in European and Australia.
The environments of increased vacation activities and business travel deals support the company’s revenue and the latest quarter was no exception. Also, the company benefits from high hotel bookings.
Q1 in summary
Orbitz Worldwide, Inc. (NYSE:OWW) reported a net loss of $5.9 million or 5 cents per share in Q1. That compared with a net income of $146.2 million or $1.34 per share in Q12013. Revenue in the quarter was up 3.7 percent to $210.3 million. Analysts expected revenue of $206.5 million and earnings per share of 2 cents in the quarter.
Justifying the loss
The company reported that the loss in the latest quarter was due to a $157.5 million related to the company’s 2013 deferred tax assets.
However, strong bookings helped to support revenue growth in the quarter. Gross bookings in the quarter were up 3 percent to $3.18 billion. The strength in the booking column was due to the higher vacation and hotel package. There were also higher booking values per share in the quarter.
The company also witnessed higher hotel room nights up 12 percent but dwarfed by 14 percent growth in the same column a year earlier.
Attaining growth through acquisitions
Orbitz Worldwide, Inc. (NYSE:OWW) looks to acquisition for growth, and if the recent quarter is anything to go by, the acquisitions are paying off. The company acquired Travelocity Partner Network early this year. The business provides technology solutions for banks and commercial retailers. The acquisition contributed about two percent of the overall revenue in the latest quarter and increased gross bookings by about 4 percent.
The company expects to undertake more acquisitions to grow revenue and subscriber base.
In addition to growing revenue, Orbitz Worldwide, Inc. (NYSE:OWW) also intends to take more aggressive internal improvements to save on costs and expenses of which the savings can be redeployed in more strategic acquisitions or returned to shareholders in dividend or stock repurchase.
