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Orbitz Profit Soars on Revenue Surge Associated Press Orbitz Inc., the Internet travel agency that is being bought by Cendant Corp., Wednesday posted a 30 percent jump in third-quarter profit, aided by a surge in hotel business. Chicago-based Orbitz said net income rose to $5.1 million, or 12 cents a share, from $3.9 million, or 10 cents a share, a year ago. The most recent quarter included several one-time items: a noncash charge of $1.4 million for restructuring; $4.2 million in expenses from the Cendant deal; and a $967,000 reversal of tax-related expenses. Excluding these items, Orbitz earned $9.7 million, or 22 cents a share, in the quarter. Analysts surveyed by Thomson First Call had been expecting third-quarter earnings, excluding items, of 12 cents a share. Revenue rose 20 percent to $77.5 million from $64.4 million a year ago. Orbitz' merchant-hotel program - where discounted hotel rooms are sold online - posted a 72 percent revenue increase from a year ago and accounted for 57 percent of hotel revenue in the most recent quarter. Merchant-hotel activity has become a highly competitive and profitable business for travel Web sites. The Web site negotiates prices with hotels below retail rates and then adds on its own markup for profit, still passing along a discount to the consumer. Orbitz' gross total bookings rose 20 percent to more than $1 billion in the quarter. On Tuesday, Cendant got antitrust approval to proceed with the acquisition, announced in September. Orbitz expects the transaction to close by the end of November. Shares of Orbitz closed at $27.50, up 3 cents, on the Nasdaq Stock Market. Contrary to strength in services demand, September factory orders fell 0.4 percent, confounding Wall Street forecasts of a 0.3 percent increase. Orders for August were revised to show a 0.3 percent decline. Capital spending remains strong, but durable goods spending has stagnated since mid-year and in September rose by a modest 0.2 percent. Widespread troubles in the U.S. airline industry are leaking through to the factory floor. Civilian aircraft orders fell 16.3 percent after a 46.2 percent plunge in August. Nomura's Jain looks for a catch-up in factory orders over the next few months as companies rush to take advantage of bonus depreciation on equipment that expires at year-end. AUTOMAKERS PAY THE PIPER AFTER STRONG SEPTEMBER Investors were less-focused on the day's economic data and more driven by asset reallocation strategies -- notably a shift into equities -- after the U.S. presidential election result. Democratic challenger John Kerry's concession of defeat to President Bush helped stocks consolidate large gains, while the U.S. dollar remained weak. However, weak auto sales and a late rush in crude oil back above $50 per barrel reminded investors of the headwinds facing the U.S. economy. That helped bond prices pare early losses. The blue chip Dow Jones industrial average closed at 10,136, up 101 points or 1.01 percent. Ten-year Treasury note yields (US10YT=RR: Quote, Profile, Research) ended at 4.07 percent, barely up from 4.06 percent on Tuesday. Domestic motor vehicles sold at a seasonally adjusted annual rate of 13.7 million units in October, lower than some analysts expected. Interest-free loans offered for terms of up to six years by Ford Motor Co. (F.N: Quote, Profile, Research) and General Motors Corp. (GM.N: Quote, Profile, Research) pushed sales to a four-month high in September but may have cannibalized sales from October. GM, the world's largest automaker, said U.S. car and truck sales eased 4.7 percent in October and lowered its fourth-quarter production forecast by 10,000 units. Ford said U.S. sales fell by 5.3 percent, the fifth straight month of lower sales for the No. three automaker. Earlier, the Mortgage Bankers Association reported that new applications for home loans rose last week to the highest level since late April, even as mortgage rates rose. Mortgage interest rates are lower than a year ago and are very affordable by historic standards. The 30-year mortgage rate averaged 5.65 percent for the week, up 0.11 percentage points. "With fixed mortgage rates remaining well below 6 percent, home buying activity remains strong," said Stephen Wood, economist at Insight Economics. "Low mortgage rates and the housing market are still stimulating overall economic activity."
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