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Cheap Tickets Cheap Tickets Inc. today reported a 66.1 percent rise in its third-quarter profit, citing its diversified approach to selling discounted travel tickets.
earnings soar 66%
Its Internet business posted
profits for the 7th straight quarterBy Russ Lynch
Star-Bulletin
The Honolulu-based company said it had a third-quarter net of $4.27 million, or 18 cents a share, for the latest period compared with a year-earlier $2.57 million, or 11 cents a share. Revenues were up 10.3 percent at $121.4 million, from $110.2 million in the third quarter 1999.
The latest per-share earnings were a penny better than the average estimate of three Wall Street analysts' who follow the company. Cheap Tickets released its earnings after the market closed today. Its shares rose 25 cents to close at $10.63. They are down 22 percent year to date, but have risen from a 52-week closing low of $8 on Oct.17.
Sam Galateos, Cheap Tickets' president and chief operating officer, said the company has a competitive advantage which helped earnings. Its multichannel approach -- selling tickets through the Internet, through retail offices across the country, and by telephone through its call centers -- has brought it increased profits in seven consecutive quarters, he said.
Galateos said commissions received from selling published-fare tickets dropped after airlines cut their commission rate to 5 percent last October, from 8 percent. However, Cheap Tickets has since been able to negotiate the commission back up by nearly two percentage points, he said.
The company received $7.2 million in commissions in the latest quarter, up 12.5 percent from $6.4 million in the year-earlier period. Revenues from nonpublished fares totaled $114.1 million in the latest quarter, up 9.9 percent from $103.8 million in the 1999 period.
The company's Internet business has boomed, particularly since late last year, when it dropped the requirement to provide a credit card number before browsing its site.
Cheap Tickets said today it now has more than 7 million registered users of its site, www.cheaptickets.com, after signing up nearly 1.6 million in the latest quarter alone.
Founded in 1986, Cheap Tickets has arrangements with dozens of airlines to sell seats at "nonpublished" fares, low prices that the airlines are willing to accept to sell seats still unsold as the flight times near. It also sells published-fare tickets for airlines and cruise lines, earning commissions just like any other travel agent.
Cheap Tickets also said today it is gearing up to launch e-ticketing on its Web site in the first half of next year. The company said delivering tickets electronically will help it capture a greater share of last-minute travelers who can't wait three to five days to have tickets delivered.