EXPEV Expedia, Inc. (MM)

Expedia Inc.'s third-quarter profit fell 1.4% as expenses rose, although robust growth at newer holdings such as HomeAway contributed to a 33% revenue increase.

The online travel company said gross bookings increased 21% to $18.6 billion.

Vacation-rental business HomeAway, acquired last December, posted a 61% revenue increase to $210 million, and revenue for search site Trivago rose 57% to $276 million.

Excluding HomeAway and Orbitz, room-night growth was 11% and revenue increased 13% to $2.16 billion.

HomeAway was a factor in Pacific Crest's upgrade of Expedia last week, when the bank said Expedia has "the best longer-term risk/reward in the space."

Expedia paid about $3.9 billion for HomeAway and $1.3 billion for Orbitz. Chief Executive Dara Khosrowshahi said in September that the company would probably be less acquisitive because of high asset prices.

Overall, Expedia earned $279.3 million, or $1.81 a share, compared with $283.1 million, or $2.12 a share, a year earlier. Earnings excluding items rose to $2.41 a share form $2.07. Revenue rose to $2.58 billion from $1.94 billion.

Analysts polled by Thomson Reuters had expected earnings before items of $2.47 a share on revenue of $2.55 billion.

Selling and marketing costs rose 28% to $1.2 billion, as costs in other categories including technology and content also increased.

Expedia said in July that it was in talks to take Trivago public by the end of the year. Expedia bought a majority stake in the German startup in 2012.

In after-hours trading, shares rose nearly 1% to $127.60.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

October 27, 2016 18:15 ET (22:15 GMT)

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