Travelzoo Inc. posted $17.4 million in revenue in the second quarter, an increase of 42 percent year-over-year.

Published: 20 Jul 2006

Travelzoo Inc. posted $17.4 million in revenue in the second quarter, an increase of 42 percent year-over-year.

Net income rose to $3.9 million, or 23 cents per share, from $2.2 million, or 12 cents per share, last year. Revenue surged 42 percent to $17.4 million from $12.3 million in the year-ago period.

“Q2 2006 marks our 32nd consecutive quarter of growth in online advertising sales,” said Ralph Bartel, chairman and chief executive officer, Travelzoo.

“With a large reach of more than 10 million subscribers in the US, Canada, and the UK and a robust business model, we believe that we are well positioned to take advantage of future growth opportunities,” said Bartel.

North America business segment revenue grew 36 percent year-over-year to $16.7 million. North America reported an operating profit of $7.5 million, or 45 percent of revenue, up from an operating profit of $3.9 million, or 32 percent of revenue, in the prior-year period.

Europe business segment revenue was $743,000, up 32 percent from $565,000 in Q1 2006. Europe reported an operating loss of $494,000, compared to $460,000 in Q1 2006. Travelzoo began operations in Europe in May 2005.

A report on thestreet.com shared, “Travelzoo has gone from Wall Street hero to zero again. Shares of the online travel publisher plunged 14 percent after it reported disappointing second-quarter results. That was the biggest loss in Travelzoo shares since April.”

It also added that results beat the 21-cent consensus estimate of analysts surveyed by Thomson Financial but trailed the $17.6 million revenue forecast. Four analysts officially cover the stock.

“From now until the end of time, a growth stock that beats on EPS and misses on revenue will go down,” said Wedbush Morgan analyst Bill Lennan, who rates the shares as a hold. He cut his price target from $35 to $30, as per the report. He also added: "I talk to customers and they love the product. The fundamentals are outstanding.”