Booming Internet sales boosted third-quarter profits at Honolulu-based Cheap Tickets Inc. by 220 percent compared with a year ago.
The company, a national leader in sales of discount tickets for U.S. travel, today reported a net profit of $2.57 million for the three months through Sept. 30, more than three times the net of $803,000 in the 1998 quarter.
Per-share earnings of 11 cents beat Wall Street analysts' mean estimate of 9.3 cents by 18.3 percent. Per-share earnings in the 1998 quarter were 4 cents and the number of shares outstanding has risen to 23.3 million, from 17.6 million a year earlier.
Cheap Tickets, which sells many airline tickets online, is treated by many investors as an Internet stock, rising and falling along with that volatile sector. The company went public in March with shares that started at $15 and soared to $30 on the first day. It hit an intraday high of $66.62 on July 30 but slid to a low of $19.50 on Oct. 21 and closed today at $23.75, up 75 cents. Today's earnings report came after the market was closed.
While the 13-year-old company still gets the majority of its business from the sources it had when it started -- across sales counters and through telephone lines -- its Internet business has soared.
In the latest quarter alone, Cheap Tickets signed up 580,000 new users on its web site, www.cheaptickets.com. These are more than casual browsers, since the company won't let users sign on until they have given a credit card number.
Cheap Tickets' gross bookings in the latest quarter, $149.6 million, were up 97 percent from $75.9 million in the year-earlier quarter and Internet sales played a big part in that increase. In the latest quarter, 30 percent of all gross bookings came through the company's Web site, compared with only about 12 percent in the 1998 quarter. The gross bookings figure is the total money received for all the airline, cruise, rental car and other bookings the company gets.
Cheap Tickets also reports on net revenues, a combination of the retail value of tickets it owns and sells itself -- what it calls nonpublished fares -- and the commissions it receives on the sale of published-fare tickets for others, such as airlines.
Net revenues of $110.2 million in the latest quarter were up 118 percent from $50.4 million in the 1998 third quarter.
It's the nonpublished fares that are Cheap Tickets' real base of operations. It arranges with airlines to buy, at large discounts, seats the airlines think they can't sell. The company resells those tickets at prices well below market.
