Orbitz hit by European economy slowdown

Orbitz hit by European economy slowdown

Online travel agency Orbitz Worldwide has reported a lower second quarter profit than expected, while also cutting its full-year growth forecast.

Shares in the online booking agent fell 20 per cent, as continued economic uncertainty hit confidence in the business.

Orbitz - which owns the CheapTickets and ebookers travel sites - said its revised outlook reflects worsening economic conditions in Europe, weaker online air travel demand and foreign-exchange challenges.

The company reported net income of $4.6 million, or 4 cents per diluted share, in the second quarter, down from $8.9 million, or 8 cents per share, a year earlier.

Orbitz added the total value of the company’s travel bookings fell one percent to $2.97 billion in the second quarter.

Quarterly revenue was flat at $201 million.

Orbitz said it now expects revenue to rise 2 per cent to 4 per cent for the full year, compared with a May view of growth between 4 per cent and 8 per cent.

Growth forecasts for adjusted earnings before interest, taxes, depreciation and amortisation for the year are now expected to be flat to up by five per cent.

In May Orbitz it had called for a seven to 12 per cent increase.