Tag Archives: ebitda

Will Global Economic Worries Slow Online Travel Giant Expedia?

Online travel agency (OTA) Expedia ( EXPE ) is set to report earnings after the close on Wednesday — and analysts polled by Thomson Reuters expect double-digit percentage growth amid challenges. Expedia is set to grow revenue by 26% to $1.71 billion in Q4, compared with the year earlier quarter revenue of $1.36 billion, according to the consensus view. EPS minus items is expected to jump 16% to $1, from 86 cents, according to the poll of analysts. Expedia stock was down about 3.5% in afternoon trading on the stock market today . The market overall was down on Monday on worries  over the global economy and oil back under $30 a barrel. Expedia has an IBD Composite Rating of 52, where 99 is the highest. Analysts have been expressing concern for the health of online travel companies as of late, citing the slowing global economy and increased competition. In a research note Monday, RBC Capital Markets analyst Mark Mahaney wrote that web traffic to Expedia’s various properties has been slightly up during the quarter, but attributed it to the fact that the firm acquired Orbitz in September and in December  HomeAway , a large alternative accommodations platform. Those acquisitions also make the quarter more difficult for analysts to model, Mahaney says. U.S. online travel trends are slightly negative, he says, based on web traffic data from ComScore ( SCOR ) that show single-digit growth that may be slowing. But, Mahaney wrote that bookings growth is likely to remain strong and that the economics of Expedia’s per-unit costs remain favorable and growing. “Expedia has been an improving execution story for some time now, and has emerged as an excellent play on the secular growth of Online Travel and as a strong integrator of assets,” Mahaney wrote in the research note. Mahaney says that he expects executives to issue guidance on earnings before interest, taxes, depreciation and amortization (EBITDA) of low double-digit growth in its core online travel bookings business. But, the slowing global economy may change that guidance. Though Expedia and rival OTA Priceline ( PCLN ) acknowledge that startup Airbnb — which lets people rent their home, room in a home, or apartment to travelers via its website — is a threat to their businesses, Priceline executives have thus far dismissed it as “not material.” Both Expedia and Priceline are adding inventory that’s similar to Airbnb’s, which in industry jargon are “alternative accommodations.” TripAdvisor Stock At Lowest Since 2013 Down more than 4%, near 56 in afternoon trading Monday, TripAdvisor ( TRIP ) stock has taken a beating thus far in 2016. The company is set to report Q4 earnings on Thursday. Analysts polled by Thomson Reuters expect the top line to grow at a modest 3% to revenue of $298.5 million, up from $288 million in the year-earlier quarter. EPS ex-items is expected to fall 6% to 33 cents from 35 cents. Cowen analyst Kevin Kopelman wrote in a research note earlier this month that TripAdvisor would be the OTA he would be most concerned about in a bear market.

GrubHub Delivers Tasty Q2 Earnings, Raises Guidance

Online food delivery service provider GrubHub (GRUB) turned in a second-quarter earnings report that topped expectations, and the company raised guidance. GrubHub, before the market opened, reported Q2 revenue of $88 million, beating the consensus estimate of $85.3 million and up 47% from the same quarter a year ago. The company reported adjusted earnings before interest, taxes depreciation and amortization (EBITDA) of $28.4 million, up 68%

E.ON Should Continue To Outperform

FY 2014 numbers were in line with low expectations. Earnings are still declining, but at a slowing speed. Cash generation is strong enough to support leverage and to allow for new growth capex. The corporate split is well under way. Relative out-performance vs RWE should continue. E.ON’s (OTCQX: EONGY ) FY 2014 results were in line. Ebitda was in line with guidance, at Eur 8.3bn (USD 8.8bn), vs. consensus of Eur 8.4bn (USD 8.9bn). Net income came in at Eur -3.3bn (USD -3.5bn), broadly in line with consensus of Eur -3.2bn (USD -3.4bn). The Eur 5.4bn (USD 5.7bn) write-offs, most of which on the power plant, were well flagged. They now allow for a clean slate ahead of the corporate split. Adjusted net income was in line at Eur 1.6bn (USD 1.7bn). Management’s guidance for 2015 Ebitda of Eur 7-7.6bn (USD 7.4-8bn) is 5% short of the Eur 7.7bn (USD 8.1bn) consensus at the mid point. The outlook is weak, but largely reflected. The power price impact is smoother than for RWE ( OTCPK:RWEOY ). Achieved hedged prices are still coming into line with market forwards over the next two years. Nevertheless, among the two Germans, E.ON stacks up much better than RWE. The generation business accounts for ~21% of Ebitda, vs. ~36% for RWE. E.ON’s generation portfolio has a stronger cash flow base due to its better fuel mix. It is cash positive. Even when excluding the one off effects of the nuclear tax and provisions release, I estimate cash flow generation would have been flat y/y. Going forward, there will be a small positive impact from capacity payments in the UK. Leverage is still high at 4.1x Ebitda, but it is slightly less of a concern: Higher cash flows leave a greater degree of financial flexibility. And, there will be further cash inflows from the various announced disposals. There will be movement on gearing as the split will entail different balance sheet structures from today. Capex is twice the amount of RWE’s capex, with a correspondingly higher level of growth capex. I estimate that at least Eur 2.5bn will go into growth capex, most of which into renewables. That will build a stronger foundation for growth post 2015. In a sector that is returning to growth mode, E.ON has a good foundation in place: Renewables, one of the most important growth drivers, account for ~15% of Ebit, vs. ~8% for RWE. The split is well under way and both new companies are viable propositions. There will be intense scrutiny on the company’s ability to meet its nuclear liabilities post split. The government has commissioned legal studies, but not found any factors that were conducive to stopping the deal at this stage. So far, there will likely be a very public debate, but outright government intervention seems less likely. While the outlook is challenging for E.ON, I expect it to outperform on a relative basis. The shares are trading on a 16x 2015E P/E which is in line with the broader sector peer group. Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.