OpenTable Heats Up on Strong Gains
Shares of OpenTable (NASDAQ:OPEN) were sent soaring to the upside on Wednesday morning following what was an exceptional third quarter from the online restaurant reservation company. The company was able to generate net income of $7.6 million, or 32 cents per share, in the quarter, up from $6 million, or 26 cents per share, in the third quarter period last year. By removing the costs associated to acquisitions and paying employees in stock, earnings came to 50 cents per share. On the top line, OpenTable was able to curn revenues of $46.7 million, a year over year increase of 18 percent. These results came in above the expectations of Wall Street on both the top and bottom lines. Analysts polled by estimated earnings of 42 cents per share on revenue of $46 million.
These better than anticipated results were fueled by the number of restaurants using OpenTable’s software. Restaurants using the company’s products rose 17 percent to nearly 31,000, while the number of people who ate at booked tables rose 30 percent to 38.5 million. OpenTable generated revenues from the fees paid by restaurants that use its software and as people use its service to make reservations.
Going forward, the company is looking to diversify itself throughout the night life seen. Increasing competition from a number of large competitors has forced the company to distinguish itself through its interface. OpenTable expects earnings of 49 to 53 cents per share, excluding one-time items, on revenue of $50.7 million to $52.1 million. At the time of this writing, shares of the company were higher by nearly 15 percent to $81.50 per share. Year to date, shares of the company are higher by a whopping 46 percent. Watch for increased volatility going into the weekend.
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