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B R E A K F A S T W I T H T H E F O O L Tuesday, October 31, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=176237 _________________________________________________________________ Sponsored By: ReliaQuote FREE life insurance quotes. Compare quotes from top-rated companies INSTANTLY! Less than 30 seconds could SAVE you hundreds of dollars a year! http://www.lnksrv.com/m.asp?i=176238 "I don't like money, actually, but it quiets my nerves." -- Joe Louis LIFTOFF AT EXPEDIA Expedia tops estimates. Is the flight plan due north? By Rick Aristotle Munarriz Online travel specialist Expedia (Nasdaq: EXPE) has been cleared for takeoff this morning after stellar fiscal first-quarter results. Revenues soared 115% to $76.5 million on $467 million in gross travel bookings. Even more impressive was the fact that the company generated positive operating cash flow. That may not last in the near term as the company expects to ramp up marketing efforts that will bulk up operating expenses. However, Expedia is still on track to be profitable on an earnings basis by the summer of 2002. The quarterly loss absent noncash charges was just $1.6 million, or $0.04 a share. That was substantially better than projections, which were calling for a deficit between $0.25 and $0.27 a share. The analyst-besting results continue the e-travel trend set by Travelocity.com (Nasdaq: TVLY) two weeks ago. But probably the most encouraging metric for the online travel industry as a whole -- a gauge that seems to be buried deep in the data -- is the rising conversion rate, or what Travelocity calls the "lookers-to-bookers" ratio. On a sequential basis, Expedia's conversion rate climbed from 4.1% to 4.6%. Over the past year, Travelocity users have gone from a 3.8% conversion ratio to a stunning 6.8%. Why is this so important? It vindicates the industry. While jaded cybersurfers seem less willing to click on banner ads or fall for spam, they have clearly embraced the notion of booking travel online in growing numbers. Since e-travel is fully scalable and information-intensive (not inventory warehouse-based) the incremental growth is the best way to assure a smooth flight to eventual profitability. Expedia closed out the quarter with $122.3 million in cash. Half of that came from recent financing that included the deep pockets of Microsoft (Nasdaq: MSFT), which still owns 70% of the company after a November 1999 spin-off. The greenbacks? Well, that just makes for a bigger seat cushion for the company as it glides past the next few quarters. And you know what they say about airline seat cushions, don't you? In case of emergency, they can be used as a flotation device. _________________________________________________________________ NEWS TO GO Santa Claus isn't the only one decked out in red this time of year. Leading playthings online retailer eToys (Nasdaq: ETYS) reported wider losses for the September quarter. However, the company expects the deficit to narrow for the critical December period with improving results next year en route to breaking even come 2002. Like Amazon.com (Nasdaq: AMZN) last week, eToys will be mailing out a print catalog this season to lure holiday shoppers online. All's well that's Alcatel (NYSE: ALA). Europe's second-leading telecommunications equipment maker bucked the trend set earlier by companies such as Lucent (NYSE: LU) and Nortel (NYSE: NT) and reported stronger-than-projected results. Profits more than tripled as the French company upgraded its sales outlook for the year. Are HMO stocks feeling better? Quarterly profits rose at Humana (NYSE: HUM) while analysts expected bottom-line results to be in line with last year's showing. The company credits its tighter cost controls and the flexibility to raise premiums as the catalysts for the healthy showing. HEALTHSOUTH (NYSE: HRC) also came in for its quarterly checkup and reported record revenues and profits of $0.18 a share -- in line with analyst expectations. Like Humana, HEALTHSOUTH was also encouraged by favorable pricing trends. Hey! That means we're paying more for HMO service, doesn't it? I thought so. Stay healthy and avoid eating any unwrapped candy tonight. Check out yesterday's Foolish market wrap-up with just one click. http://www.fool.com/m.asp?i=176239 _________________________________________________________________ EDITORS' PICK Early retirement requires a lot of strategic planning and includes some additional hurdles. Other than that, David Braze doesn't think it's that special. http://www.fool.com/m.asp?i=176240 _______________________________________________________________ -News & Commentary http://www.fool.com/m.asp?i=176241 -Fool Community http://www.fool.com/m.asp?i=176242 -Post of the Day http://www.fool.com/m.asp?i=176243 -Latest Fribble http://www.fool.com/m.asp?i=176244 -Latest Market Numbers http://www.fool.com/m.asp?i=176245 ____________________________________________________________ My Portfolio: http://www.fool.com/m.asp?i=176246 My Discussion Boards: http://www.fool.com/m.asp?i=176247 My Fool: http://www.fool.com/m.asp?i=176248 Fool.com Home: http://www.fool.com/m.asp?i=176249 My E-Mail Settings: http://www.fool.com/m.asp?i=176250 Sponsored By: ReliaQuote FREE life insurance quotes. Compare quotes from top-rated companies INSTANTLY! Less than 30 seconds could SAVE you hundreds of dollars a year! http://www.lnksrv.com/m.asp?i=176251 ONLY ONE DAY LEFT! Enroll in our Roadmap to Retirement online seminar. 100% money-back guarantee. http://www.fool.com/m.asp?i=176252 TRY THE ALL-CASH DIET Get your spending under control with this report from Soapbox.com. http://www.lnksrv.com/m.asp?i=176253 FOOL DIRECT E-MAIL SERVICES Need to change your address or unsubscribe? You can also temporarily suspend mail delivery. Click here: http://www.fool.com/community/freemail/freemaillogin.asp?email=benjamin.rogers @enron.com< Have ideas about how we can improve the Fool Direct or new e-mail products you'd like to see? Try our discussion board: http://www.fool.com/m.asp?i=176254 ____________________________________________________ © Copyright 2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. . MsgId: msg-7813-2000-10-31_9-04-12-3265218_2_Plain_MessageAddress.msg-09:09:02(10-31- 2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com
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