Expedia proves online hit

Expedia is drawing new customers to the internet

Expedia, the online travel group, has beaten expectations for the third quarter as internet travel companies continue to outperform traditional groups.

Expedia's bookings doubled in the three months to September as both holidaymakers and business customers took to finding holidays on the internet.

The group said growing sales from its hotel business had lifted earnings and it predicted a robust end to the year.

Analysts were cheered by the results, with shares gaining over 5% in after hours trading.

Online discount

Expedia reported a profit of $20m (£13m) for the July to September period, against a loss of $4.8m in the same quarter a year ago.

Earnings came in at 49 cents per share, way above analysts' expectations of 40 cents per share.

Chief executive Richard Barton said the company was gaining market share from other travel agencies, both on and offline.

The group had also seen a sharp rise in hotel and package holiday bookings.

Mr Barton forecast earnings of 40 cents per share and revenue of around $160m for the final three months of the year, in line with the Wall Street expectations.

Share boost

The good news sent shares in Expedia up from $57.61 to $60.80 in after hours trading. They had already risen 5% before the market close.

The company has outperformed the sector this year, with a rise of more than 40% in its share value.

The gains are in sharp contrast to the struggles of more traditional travel companies and airline groups.

Analysts say the deep discounts offered online, together with the "last-minute" approach to booking is more attractive to customers in times of a slowing economy.

However, Mr Barton said on Wednesday that the company's growth was best assured in strong economic conditions.