Updated version 1 - Affected by geopolitical tensions, Expedia predicts a decline in fourth-quarter revenue.

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Anshuman Tripathy

Reuters, November 4 - Online travel company Expedia Group (EXPE.O) forecasted that its fourth-quarter revenue will generally fall short of Wall Street expectations, citing that the sector is being affected by Middle East conflicts and turmoil in Europe, leading to its stock price dropping about 6% in after-hours trading.

The company on Wednesday projected fourth-quarter revenue between $3.69 billion and $3.75 billion, with the midpoint below analysts’ estimate of $3.74 billion.

This subdued outlook overshadowed strong third-quarter revenue and profits that topped expectations, as stable spending by affluent consumers continued to support international travel demand despite persistent inflation.

“U.S. consumers showed strong performance in both domestic travel and outbound trips to Europe and Asia,” CEO Ariane Gorin told Reuters.

Gorin attributed the more cautious fourth-quarter outlook to the U.S. midterm elections and turmoil in the Middle East and Europe.

Her comments echoed those from rival Booking Holdings (BKNG.O) on Tuesday, which also cited travel disruptions to and from the Middle East, the impact of higher airfares, and unrest in certain European cities.

Hotel operators including Hilton HLT.N and Marriott MAR.O also noted that Middle East conflicts and the impact of elections would weigh on their fourth-quarter performance.

Gorin pointed out that in Europe, the number of domestic travelers is higher than that of long-haul outbound travelers.

Expedia raised its annual total booking forecast to a range of $131.4 billion to $131.9 billion, up from a previous expectation of $129.5 billion to $130.8 billion.

According to data compiled by London Stock Exchange Group (LSEG), analysts had previously expected annual total bookings to average $130.22 billion.

The Seattle-based company expects annual revenue to be between $16.37 billion and $16.43 billion, up from its prior forecast of $16.05 billion to $16.22 billion.

Expedia reported adjusted earnings per share of $9.39 for the third quarter, ahead of Wall Street’s expected $8.89.

Revenue for the parent company of Vrbo grew about 12% in the quarter ended September 30, reaching $4.94 billion, beating expectations of $4.74 billion.

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