Stox in USAI, Hotels.com subsid tumble
NEW YORK — USA Interactive stood by its fourth-quarter financial forecast Monday, despite a warning from key ecommerce subsid Hotels.com that revenue and earnings for the quarter would come in well short of prior expectations.Investors still handed out a beating to both companies’ stocks in Monday’s markets. Shares in the Barry Diller-controlled USAI tumbled over 8% to $22.23, while Hotels.com’s separately traded stock lost a quarter of its value, sinking $15 to $44.02. Blaming a slump in hotel occupancy and per-room rates, online accommodations firm Hotels.com warned that fourth-quarter net income would come in at $22.5 million-$23 million. That’s down from earlier projections of $27 million-$28 million, announced last fall. As for the top line, the company expects revenues of $270 million-$271 million, compared with previous forecasts of $283 million-$289 million. USAI, by contrast, stuck with claims made in October that it would beat the revenue predictions from its 2002 budget (filed with regulators in January) by 2% and top its cash-flow estimate by 10%. Company cited strength in its units Expedia.com, Match.com and Hotels.com. USAI said Monday that bookings and room-rate growth hadn’t performed up to expectations in the months since the October predictions, causing the Hotels.com shortfall. Wall Street also fretted over potential ripple effects for USAI’s other travel and entertainment-related businesses, such as Expedia. USAI shares have slipped by more than 30% from their highs last spring of around $33 but rebounded significantly in recent weeks from a low near $15 in October.
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