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.
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.
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.