Jefferies Gives Earnings Preview On Expedia

Normalized for external events such as the Japan quake, Expedia's EXPE 1Q should come in slightly ahead of Street expectations, with healthy growth across all segments. Jefferies is maintaining a Buy/$31 PT. Expedia reports 1Q on Thu., April 28. Jefferies expects better than expected 1Q, with $805M in revenue and $0.27 in normalized EPS vs. Street expectations of $795M and $0.26, respectively. Jefferies notes that consensus and its estimates does not reflect the impact from Japan, Mid-East and North Africa and weather. Jefferies expects $7.4B in gross bookings, with Leisure at $6.84B and Egencia at $560M. Leisure revenues should total $673M, TripAdvisor Network $93M and Egencia $39.4M. US hotel Average Daily Rate grew 3.1% Y/Y in 1Q vs. 1.9% in 4Q, while Occupancy was up 5.7% in 1Q vs 7.1% Y/Y 4Q, according to STR. In Europe, Occupancy was up 3.0% Y/Y while ADR was up 5.7% in 1Q, vs. Occupancy/ADR growth of 4.3%/7.1% in 4Q. While resolution of EXPE-AA dispute creates an incremental upside, Jefferies expects mgt. to reiterate FY11 outlook for mid-single-digit OIBA growth in FY11, given the hit to Japanese travel, the Middle-East unrest and competition from Google Places. Current consensus is for 3% Y/Y growth in OIBA. EXPE is trading lower at $24.36