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Travelocity.com Registers First Operating Profit

Fort Worth-based Travelocity.com Inc. has reported its first quarterly operating profit, after excluding charges, one quarter ahead of the company's expectations.

The five-year old online hotel and airline ticket broker said its first-quarter operating earnings before charges were $618,000, or three cents a diluted share, compared with a year-earlier loss of $5.6 million, or 31 cents a share. Travelocity.com recorded a net loss of $22.2 million, or $1.14 a share.

Thomson Financial/First Call had predicted a loss of five cents a share.

The company competes with several airlines entering the space, including Northwest Airlines -- which ironically supplies it with the discounted inventory it marks-up to sell to consumers -- at a still cheaper rate.

Besides airlines, other dot-coms continue to market their brand to users. One, in particular, Microsoft-backed Expedia.com has posted positive earnings guidance.

On April 16, Expedia.com said it would report its first operating profit in the third quarter, though losses including charges will be substantial.

The Bellevue, Wash.-based company said it plans to report revenue of about $110.6 million. First Call predicted revenues of $90.3 million. However, after noncash items, including amortization of goodwill and intangibles from acquisitions and amortization of stock-based compensation, Expedia said its net loss would be about $18 million, or 37 cents a share.

Expedia recently worked out a deal with Northwest-KLM by which it could sell tickets without paying a surcharge.

And another competitor, Priceline.com, continues to restrategize its operations to focus on the travel industry. In early April, the company said it expected first-quarter revenue to rise 15 percent to 20 percent up from $228.2 million in the fourth quarter and a first quarter pro forma loss of 5 cents to 7 cents a share.

The well-known company said it expected second-quarter revenue to increase 10 percent to 15 percent from the first quarter and it predicted a second quarter pro forma operating profit.

Travelocity.com has made a strong effort to best the competition by capitalizing on users visiting its site. Through e-mail marketing campaigns and other promotions the company was able to measure growth in travel bookings of 65 percent over the first quarter of last year. The company also said its average monthly unique bookers were 661,000, up 67 percent from 395,000 for the same period a year ago and up 26 percent from 525,000 for the prior quarter.

Terrell Jones, president and CEO of Travelocity.com said "Our results prove that the concept of booking travel on the Internet works."

The company predicts that despite economic pressures it will experience modest growth during the remaining three quarters of the year with a net profit, excluding special items, that will range from $0.17 to $0.21 per share for 2001.

Travelocity.com is 70 percent owned by Sabre Holdings Corp and has 1,300 employees.

In early morning going, shares in Travelocity.com were trading at $25.50, up $1.32 from yesterday's close at $24.08.