Reuters: Hot Stocks: UPDATE 3-Competition, discount website drag on Expedia; shares tank

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UPDATE 3-Competition, discount website drag on Expedia; shares tank Jul 25th 2013, 22:42 Thu Jul 25, 2013 4:45pm EDT * 2nd-qtr adj earnings $0.64 vs est. $0.79 * Revenue $1.21 bln vs est. $1.26 bln * Selling and marketing costs jump 33 pct * Shares slide 23 percent (Adds details, background; updates shares) July 25 (Reuters) - Online travel agency Expedia Inc reported a quarterly profit that fell far short of analysts' expectations as selling and marketing costs soared, sending its shares down 23 percent in after-hours trading. Expedia, whose brands include Hotels.com and discount website Hotwire, has faced rising costs as it expands in international markets to better compete against rivals such as Priceline Com Inc and Orbitz Worldwide Inc. Selling and marketing expenses jumped 33 percent to $590.5 million in the second quarter ended June. Expedia said that trivago - a German travel site in which it acquired a majority stake earlier this year - contributed about a third of the increase in these costs. General and administrative costs rose 10 percent. Expedia said in April it expected a lower full-year profit from Hotwire due to rising car rental rates. Expedia said on Thursday that net profit attributable to the company fell to $71.5 million, or 51 cents per share, in the second quarter ended June, from $105.2 million, or 76 cents per share, a year earlier. (r.reuters.com/dur89t) Excluding items, Expedia earned 64 cents per share. Revenue rose 16 percent to $1.21 billion. Analysts on average had expected earnings of 79 cents per share on revenue of $1.26 billion, according to Thomson Reuters I/B/E/S. Expedia's shares were down 23 percent at $50.37 in after-market trading. (Reporting by Sagarika Jaisinghani in Bangalore; Editing by Sriraj Kalluvila and Ted Kerr) Link this Share this Digg this Email Reprints

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