By Nora Macaluso E-Commerce Times
09/18/01 10:40 AM PT
Online travel site Expedia remains optimistic about its long-term
future despite 'significant' cancellations in the days following the terrorist attacks.
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With corporate assessments of the damage from last week's terrorist
attacks beginning to trickle in, e-travel company
Expedia said
Tuesday that bookings are "encouraging," and Internet auctioneer eBay said
that it remains on track to meet its third-quarter earnings
and revenue goals.
However, Chuck Hill, director of research at
First Call, which tracks corporate earnings estimates,
told the E-Commerce Times that eBay and others may yet be hurt
if the economy heads into recession.
"We expect (analyst) earnings estimates to come down this
week," Hill said. While travel, airline and other companies that
are clearly affected will be the first to see estimates slashed,
"I think we'll see estimates come down eventually" for consumer-related stocks,
he said.
"It's probably going to take the analysts several weeks before
they get some sense of how much the consumer's going to cut back," Hill said.
eBay, based in San Jose, California, said it is "comfortable" with
analyst estimates for revenue of US$185 million and net income
of 11 cents per share for the quarter ending September 30th,
even with the "general business impact" of the disruption
caused by the attacks. The company has launched a
charity initiative
aimed at raising money for the victims that includes a $1 million
in seed money donated by eBay.
Cancellations High
Meanwhile, Expedia said bookings for September 12th through
16th -- the days just after the attack -- were running at 35
to 40 percent of the prior week's levels. On September 17th,
bookings were about 45 percent of week-earlier levels.
However, those figures exclude cancellations, which have
been "significant," the Bellevue, Washington-based online travel company said.
"In light of last week's tragedies, we believe our early
booking levels are an encouraging indication of the resilience
of the American spirit," Expedia president and chief executive
officer Richard Barton said.
The Road Ahead
Expedia chief financial officer Gregory Stanger said it is
still "too early" to determine the "near-term impact" of
the September 11th attacks on the company's business. However,
he said, "long term, we believe our travel bookings will
again increase at an attractive growth rate."
During July and August, Expedia's revenue was on track to
reach $90 million for the quarter, the company said. Expedia
also said it "continues to work with USA Networks" on
the planned sale of
a majority stake to the media company.
More Buybacks
The announcements from eBay and Expedia came after U.S.
stock prices -- particularly those of insurers, airlines
and companies dependent on air travel or delivery --
tumbled Monday,
the first day of trading since the attacks.
The drop came even as the Federal Reserve lowered its targets
for key interest rates, and companies rushed to
buy back their own shares.
On Tuesday, online advertising company DoubleClick (Nasdaq: DCLK)
said it would repurchase up to $100 million of its stock over
the next 12 months.
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