(This version of the Oct 25 story corrects last paragraph to say revenue missed, not beat, Street estimates)
By Arunima Banerjee
(Reuters) - Expedia Group Inc (EXPE.O) saw major growth in its vacation rental business HomeAway and higher travel bookings in the third quarter, helping it to beat Wall Street’s profit estimates on Thursday.
Expedia said customers spent 24 percent more on HomeAway bookings and that the business, which competes with Airbnb, is headed for strong revenue and profit growth this year.
“Overall, HomeAway is the brightest spot,” CFRA Research analyst Tuna Amobi said
Shares of the company were up about 5 percent in late trade.
Amobi, however, warned that the fourth quarter may not be as strong as the third and a key thing to watch would be whether Expedia is able to maintain this type of growth trajectory.
Expedia said costs for hiring and automation may pressure the current quarter.
The Bellevue, Washington-based company, which runs an eponymous website as well as brands including Hotels.com and Hotwire, said the value of bookings on its platforms rose 11 percent during the third quarter ended September.
Expedia, which has grown through a string of acquisitions, is aggressively investing to migrate to cloud computing systems to cut costs and improve marketing to better compete with rivals like Booking Holdings (BKNG.O).
However, Expedia lowered its expectations for spending on cloud to about $150 million in 2018 from its earlier forecast of below $170 million. But it reiterated that cloud expenses in 2019 would exceed $250 million.
The company expects adjusted earnings before interest, tax, depreciation and amortization (EBITDA) growth in 2018
Net income attributable to Expedia rose to $525 million or $3.43 per share in the quarter, from $352 million or $2.23 per share a year earlier.
Excluding one-time items, the company earned $3.65 per share, topping Wall Street expectations of $3.12, according to Refinitiv data. (bit.ly/2z7ybNI)
Revenue climbed 10.5 percent to $3.28 billion, missing estimates of $3.30 billion.
Reporting by Arunima Banerjee in Bengaluru; Editing by Anil D'Silva and Sai Sachin Ravikumar