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Orbitz narrows loss as it shifts away from airline bookings  Aug 06, 2008

Orbitz Worldwide Inc. posted a narrower second-quarter net loss amid strong international results and efforts to shift focus away from airline bookings.

Shares of Orbitz slumped Monday when the company said it would delay the release of its quarterly results to Thursday, saying its financial statements hadn't been finalized.

The company disclosed Wednesday that it will restate results to correct how some intercompany transactions with Travelport Ltd. and credit-card receipts at foreign operations were classified. The changes affect only historical statements for several balance-sheet items, including cash flow and cash and cash equivalents.

The online travel agent reported a net loss of $5 million, or 6 cents a share, compared with a year-ago net loss of $32 million. Year-ago per-share figures weren't provided.

Revenue edged up 1 percent to $231 million.

The mean estimates of analysts polled by Thomson Reuters were for a per-share loss of 3 cents on revenue of $234 million.

Gross bookings rose 4 percent to $3 billion, with international bookings surging 41 percent due on increased transactions and prices. The segment now accounts for 23 percent of revenue, up from 20 percent a year ago.

Domestic bookings declined 1 percent amid airline weakness, but new ad deals and partnerships should aid the rest of the year and “help offset any impact from current economic and travel industry uncertainty,” President and Chief Executive Steven Barnhart said. Such efforts include a multiyear deal with Microsoft Corp. to serve as the online travel provider for's travel portals in the U.S. and U.K.

Orbitz, which went public a year ago, began as the airline industry's response to the success of online travel sites. Continental Airlines Inc., Delta Air Lines Inc., Northwest Airlines Corp. and UAL Corp.'s United banded together to create the site, investing $145 million to launch the company in 1999. The site went online in June 2001.

Since then, the site has seen rising competition from direct sellers including AMR Corp.'s American Airlines and Marriott International Inc., as they increasingly began to offer consumers similarly low prices along with such benefits as frequent-flier miles and hotel points. Bargain shoppers can also more easily search for their cheapest option with the help of metasearch engines, which search for travel services but don't allow you to book directly.

Orbitz shares closed Tuesday at $5.75, and there was no pre-market trading.

Orbitz narrows loss as it shifts away from airline bookings

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