United Kingdom
United States
Asia Pacific
Expedia hit by $3bn impairment charge
Tuesday, 20 Feb, 2009
0
Expedia’s fourth quarter operating income was hit by a $3 billion impairment of goodwill and intangible assets.
This was primarily related to a decline in the global online travel company’s market capitalisation.
An operating loss of $2,889.1 million was recorded for the quarter as a result, against a profit of $128.3 million in the same three months of 2007.
Gross profit for the fourth quarter of 2008 was $484 million, a decline of seven per cent year-on-year primarily due to decreased revenue, the company said.
The gross profit for 2008 came in at $2.3 billion, an increase of nine per cent over 2007, mainly due to increased revenue, partially offset by a 51 basis point reduction in gross margin to 78.39%.
Chairman and senior executive Barry Diller said: "The story of 2008 – and 2009 for that matter – is clearly the global recession and its impact on nearly every sector of our economy.
"When we emerge from this downturn is anyone’s guess, but what certainly is not a guess is Expedia’s global leadership in travel and our conservative management, both of which will allow us to weather a downturn of almost any length and come out stronger than when this mess began."
CEO and president Dara Khosrowshahi added: "While we have taken a substantial write down of the accounting value of our goodwill largely due to significant stock market declines, we believe that the core value of the Expedia brands and marketplace are considerable and lasting.
"We remain focused on growing shareholder value by improving our offerings to travellers, suppliers and advertisers, as well as ensuring appropriate spending and investment levels for this historically difficult demand environment."
Gross bookings in the fourth quarter were down by 11%. North America bookings dropped by 13%, Europe by 11% (down 1% excluding the estimated net negative impact from foreign exchange) and other bookings – primarily Egencia and Asia Pacific operations – increased by four per cent.
Gross bookings for the full year increased by eight per cent. North America bookings rose by four per cent, Europe bookings increased 18% (14% excluding the estimated net benefit from foreign exchange) and other bookings were up by 23%.
by Phil Davies
Related News Stories:
Phil Davies
Bubba O’Keefe on Clarksdale’s Vibrant Music Scene
Commemorating Elvis and Embracing Tupelo’s Culture with Jennie Bradford Curlee
Craig Ray and the Expansion of the Blues Trail
Presenting Mississippi’s Cultural Trails with Katie Coats
Robert Terrell: A Journey Through BB King’s Influence
Rochelle Hicks: Celebrating Mississippi’s Musical Legacy
Exploring Jacksonville with Katie Mitura: The Flip Side of Florida
Tricia Handley-Hughes of Inteletravel announces the location for the TravelQuest 2025 conference
Insights from James Ferrara on Inteletravel’s Growth and Future
Tricia Handley-Hughes on Inteletravel’s Growth and Challenges
Tony from Gatto’s Pizza on Columbus’s Unique Pizza Trail
Sophia Hyder Hock on Global Social Inclusion in Tourism
Dozens fall ill in P&O Cruises ship outbreak
Woman dies after getting ‘entangled’ in baggage carousel
Turkish Airlines flight in emergency landing after pilot dies
Boy falls to death on cruise ship
Protestors now targeting Amsterdam cruise calls