Expedia Group (EXPE) Q4 earnings preview: Growth expected amid strong travel demand

Expedia Group, a prominent online travel agency, is slated to unveil its fourth-quarter earnings for December later today. Analysts forecast an adjusted earnings per share (EPS) of $1.67, marking a 33% increase year-over-year, and anticipate revenues to reach $2.87 billion, showing a 10% rise from the previous year.

This upcoming report follows Expedia's commendable third-quarter performance, where it surpassed expectations for both revenue and earnings and reaffirmed its revenue growth outlook for 2023. Additionally, the announcement of a $5.0 billion share buyback program last quarter has positively influenced investor confidence.

The third quarter saw robust travel demand, especially in North America and Europe, while the Asia-Pacific and Latin American regions witnessed even more pronounced growth due to relaxed travel restrictions and borders reopening.

A key highlight from Expedia's third-quarter performance was the significant progress in its B2B sector, which saw a 150% increase in bookings from partners in China. The company anticipates continued strength in this area.

Despite these positive indicators, there are potential headwinds for the fourth quarter, including slight price pressures in air and car travel and a minor year-over-year decrease in lodging average daily rates (ADRs). Additionally, geopolitical tensions in the Middle East early in October may have slightly impacted global travel plans.

However, the outlook for Expedia remains positive, with signs of a bullish FY24 forecast expected. This optimism is supported by indicators from the broader travel industry, such as American Express's 9% year-over-year increase in travel and entertainment spending in Q4 and United Airlines's resurgence in business travel, which bode well for Expedia's B2B operations. Delta Air Lines also reported strong holiday travel demand in Q4.

With the travel industry showing sustained momentum, Expedia's Q4 earnings report is highly anticipated, potentially influencing expectations for the sector. Competitors Airbnb (ABNB) and Booking Holdings (BKNG) are scheduled to report their fourth-quarter results soon, adding context to the industry's performance.

Overall, as Expedia Group prepares to disclose its latest financials, the focus will be on its ability to maintain growth amidst a favorable travel climate and investor anticipation of positive future guidance.

$EXPE(EXPE)