) is set to report first-quarter 2014 results on May 1. Last
quarter, the company posted 6.6% positive surprise. Let's see how
things are shaping up for this announcement.
Growth Factors This Past Quarter
Expedia's fourth-quarter earnings of 81 cents soared 52.2%
year over year - the highest in five quarters - driven by strong
growth in the online travel booking industry. Revenues of $1.15
billion were down sequentially but up year over year,
attributable to healthy growth rates across most brands,
especially for Expedia, Trivago and Hotels.com.
Margins were, however, affected in the quarter due to lower
volumes. We believe Expedia's growth in Asia (much lower ADRs and
revenue per room night) remains stronger than in other regions
and will likely have a negative impact on margins, while driving
Additionally, TripAdvisor's transition to the metasearch model
had a positive impact on the last quarter's results.
Our proven model does not conclusively show that Expedia will
beat earnings this quarter. That is because a stock needs to have
both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 2 cents. Hence, the difference is 0.00%.
Expedia's Zacks Rank #2 (Buy) when combined with a 0.00% ESP
makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
You could consider other stocks with a positive Earnings ESP
and Zacks Rank #1, 2 or 3 such as:
North American Palladium Ltd.
), with Earnings ESP of +33.33% and a Zacks Rank #1 (Strong
Salix Pharmaceuticals Ltd.
), with Earnings ESP of +29.27% and a Zacks Rank #1.
Advanced Energy Industries, Inc.
), with Earnings ESP of +10.00% and a Zacks Rank #1.
ADV ENERGY INDS (AEIS): Free Stock Analysis
EXPEDIA INC (EXPE): Free Stock Analysis
NORTH AM PALLAD (PAL): Free Stock Analysis
SALIX PHARM-LTD (SLXP): Free Stock Analysis
To read this article on Zacks.com click here.