Orbitz Down On Net Loss And Weak Outlook

Chinese Fight Punch

Photo: www.legendfc.com

Orbitzis is down over 5% today after posting a fourth-quarter net loss and lowering its forecast for earnings for the first quarter to $177 million-$184 million below analysts’ expectations of $194 million.On a conference call with analysts Orbitz CEO Barney Harford said the U.S. leisure business is being impacted by the American Airlines fallout and that he recognised the significance of finding a resolution with the airline.

  • Orbitz reported a net loss of $78 million or $0.76 per share compared to a net loss of $18.1 million in the prior year. Analysts expected a loss of $0.05 per share.
  • Revenue for the fourth quarter did beat expectations with a rise of 4% to $182.4 million mostly due to its hotel bookings business
  • It was downgraded by Piper Jaffray and had its earnings forecast and price targets lowered by UBS today
  • Revenue from American Airlines tickets booked on Orbitz.com and Orbitzforbusiness.com contributed about 5% to the company’s 2010 revenue.
  • Shares have dropped 35% since the December fallout with American Airlines.
  • UBS analyst Kevin Crissey wrote in a research note this morning, “The nearer-term upside catalyst potential, in our view, would be a resolution of its distribution spat with American Airlines (and a pick-up in domestic air volumes).”

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.