Online travel agency Orbitz Worldwide posted a quarterly profit, helped by lower expenses, on Thursday, but the results missed expectations and shares fell more than 9 percent in early trading.
In addition to its earnings, Orbitz said it had received equity investments amounting to $100 million.
Orbitz linked its profit to lower expenses and more bookings as it slashed fees and offered promotions to offset weak demand during the economic recession.
As a result we've seen accelerating trends in our business, including a 27 percentage point increase in the year-on-year growth rate in air tickets in the third quarter 2009 as compared with the first quarter 2009, Orbitz Chief Executive Barney Harford said in a statement.
For the third quarter, net income was $7 million, or 8 cents a share, compared with a net loss of $287 million, or $3.44 a share, a year ago.
Analysts on average were expecting earnings of 12 cents a share, on revenue of $202.0 million, according to Thomson Reuters I/B/E/S.
Net revenue for the company, which owns major travel sites Orbitz.com and Cheaptickets.com, fell 22 percent to $187 million, due mainly to the removal of most air booking fees and significant reduction of hotel booking fees on the company's domestic websites.
The total value of Orbitz's bookings fell 6 percent due to lower air fares and lower average hotel room rates.
Selling, general and administrative expenses fell 13 percent to $65 million, while marketing expenses dropped 44 percent to $48 million.
Separately, Orbitz Worldwide announced equity investments totaling $100 million from PAR Investment Partners and Blackstone-controlled Travelport.
These transactions will enable us to reduce our debt by $50 million, increase our cash by $50 million, and give us additional operating flexibility as we pursue the global hotel distribution opportunity, Harford said.
The company's shares fell 9.2 percent, or 50 cents, to $4.91 on the New York Stock Exchange.
(Reporting by Kyle Peterson in Chicago and Bhaswati Mukhopadhyay in Bangalore; Editing by Aradhana Aravindan and Maureen Bavdek)