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Orbitz Worldwide, Inc. Reports First Quarter 2010 Results

05/06/2010| 10:11:40 AM| 中文

Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the first quarter ended March 31, 2010.

CHICAGO, May 5, 2010 /PRNewswire via COMTEX/ --Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the first quarter ended March 31, 2010.

"Orbitz Worldwide delivered strong Adjusted EBITDA growth of 12% in the first quarter. Transaction growth accelerated for the fourth consecutive quarter to 20% driven by consumer fee reductions and ongoing operational improvements," said Barney Harford, president & CEO of Orbitz Worldwide. "Room night growth remained solid at 13%, with particular strength coming from ebookers and Orbitz for Business, which grew stayed room nights 80% and 26% respectively."

First Quarter 2010 Financial Highlights

For the first quarter 2010, the company reported a net loss of $5.3 million or ($0.05) per diluted share compared with a net loss of $336.2 million or ($4.02) per diluted share for the first quarter 2009, which included a $331.5 million non-cash goodwill and intangible asset impairment charge. Adjusted EBITDA increased 12 percent year over year to $30.6 million from $27.4 million for the first quarter of the prior year.

Gross Bookings and Net Revenue

Global gross bookings increased 24 percent (22 percent on a constant currency basis) year over year. This increase was due primarily to higher transaction volume and higher air fares. Air gross bookings increased 30 percent (29 percent on a constant currency basis) and non-air gross bookings increased 11 percent (seven percent on a constant currency basis) year over year. Domestic gross bookings increased 21 percent and international gross bookings increased 41 percent (25 percent on a constant currency basis) year over year.

Net revenue was $187.2 million for the first quarter 2010, a decrease of one percent (three percent on a constant currency basis) year over year. Domestic net revenue was down eight percent while international net revenue increased 38 percent (19 percent on a constant currency basis) year over year. The net revenue decline was due primarily to the removal of most domestic air booking fees and a significant reduction in hotel booking fees, partially offset by higher air and standalone hotel transactions.

 --Air net revenue was $71.6 million in the first quarter 2010,

     down 12 percent (13 percent on a constant currency basis) year

     over year.  Domestic air net revenue declined $13.2 million or 20

     percent due to the removal of most domestic booking fees in April

     2009, partially offset by higher air transactions as a result of

     the fee removals. The company´s domestic air transaction growth

     rate increased 34 percentage points in the first quarter 2010

     compared with the first quarter 2009 when the company still

     charged booking fees on all airline tickets. The anniversary of

     the fee removals was in early April 2010, and as a result, the

     company expects that its air transaction growth rates will be

     slower for the balance of the year.  International air net

     revenue increased $3.5 million or 23 percent (14 percent on a

     constant currency basis) year over year due primarily to higher

     air transactions, partially offset by lower net revenue per

     airline ticket.

    -- Hotel net revenue was $43.5 million in the first quarter

     2010, up ten percent (two percent on a constant currency basis)

     year over year.  Hotel net revenue increased due to strong

     performance at ebookers driven by an increase in standalone hotel

     transactions and an increase in net revenue per transaction.

     This strength at ebookers was partially offset by weak

     performance at HotelClub.  The decline at HotelClub was driven by

     lower volume in European destinations and lower net revenue per

     transaction due to the shift in the geographic mix of its

     bookings.  The Asia-Pacific region now represents over 65% of

     HotelClub transactions.  Hotel net revenue for the company´s

     domestic brands was flat year over year.  Lower hotel booking

     fees and lower breakage revenue offset the increase in domestic

     standalone hotel transactions.

    --Vacation package net revenue decreased four percent in the

     quarter to $27.9 million as a result of lower domestic

     transactions and lower breakage. The decline in domestic

     transactions was primarily due to higher pricing for packages.

     Strong demand for packages at ebookers partially offset this

     decrease.

    --Advertising and media revenue decreased 13 percent year over

     year to $12.2 million, primarily due to a decline in revenue from

     third party referral programs, specifically membership discount

     programs.  Effective March 31, 2010, the company ended the third

     party membership discount program previously offered on its

     domestic websites and terminated its relationship with its

     supplier for these programs.  The company is actively seeking out

     opportunities to offset some if not all of the resulting revenue

     decline over time.

    --Other net revenue, which primarily includes car rental, cruise,

     destination services and travel insurance revenue, increased 29

     percent (28 percent on a constant currency basis) year over year,

     due to an increase in global travel insurance revenue, domestic

     car rental revenue and revenue from credit card surcharges.

     Travel insurance revenue increased due to a change in the timing

     of revenue recognition and, to a lesser extent, higher air

     transaction volume, higher attachment and higher air fares.

     Domestic car net revenue increased due to higher volume,

     partially offset by lower average daily rates for car rentals.

Operational Highlights

In April, the company entered into an exclusive, multi-year partnership with New Orleans-based iSeatz to develop customized private label and in-path travel solutions. As part of the agreement, Orbitz Worldwide will give customers of existing iSeatz partners, including Delta Air Lines, Air France, KLM and Amtrak, the ability to book travel products through the Orbitz Worldwide global network of suppliers. Orbitz Worldwide and iSeatz will work together to bring increased power and flexibility to travel suppliers around the world.

As of March 31, 2010, Orbitz Worldwide offered approximately 100,000 bookable hotels on its websites. Orbitz Worldwide websites offer 40,000 hotels in the EMEA region and 16,000 hotels in the Asia Pacific region.

In February, the company removed hotel change and cancellation fees on its ebookers websites. The company previously removed hotel change and cancellation fees on its Orbitz and CheapTickets websites in September 2009.

Orbitz for Business completed a strong first quarter, delivering 25% year over year transaction growth. This growth reflects accelerating corporate travel demand and the addition of new customers. During the first quarter, Orbitz for Business added major new clients including FMC Corporation and the European business of Cooper Industries. In addition, Orbitz for Business signed renewals with IBM and Yale University.

During the first quarter, Orbitz Worldwide signed global contracts with a number of destination marketing organizations including the Puerto Rico Tourism Company, Vancouver Tourism and Illinois Bureau of Tourism to promote travel to those destinations. Orbitz Worldwide now has partner marketing agreements with nearly 165 destination marketing organizations.

Q2 2010 Outlook

For the second quarter 2010, the company expects to report:

3% to 6% year over year increase in net revenue;

20% to 22% cost of revenue as a percentage of net revenue, reflecting increased costs associated with higher transaction volume and higher customer service costs as a result of the eruption of the Eyjafjallajökull volcano; and 10% to 20% year over year decrease in Adjusted EBITDA, reflecting a number of factors, the largest of which is an expected year over year increase in marketing expense in the second quarter.

For the full year 2010, the company expects total marketing expense as a percentage of net revenue will approximate 2009 levels, although the 2010 quarterly pattern of marketing expenses will vary from the 2009 pattern. The company also expects that Adjusted EBITDA for the full year 2010 will exceed the full year 2009. The company anticipates annual capital expenditures in the range of $40 million to $45 million, consistent with 2009 levels.

The outlook above assumes relatively stable foreign exchange rates.

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