Orbitz Worldwide, Inc.'s (NYSE:OWW) small cap stock fell sharply on Wednesday after the travel site posted lower second-quarter profit and slashed its full-year forecast more than analysts had expected.
The company cited increasing global uncertainty as the reason for the full-year earnings cut, with a slowdown in European travel especially disruptive to business. According to the Chicago Tribune, Orbitz is one of many online travel companies that are "going to experience increasing or incremental weakness for at least the next quarter if not into the fourth quarter," said Benchmark Co. analyst Daniel Kurnos.
According to the news source, Orbitz, which also has CheapTickets and other ebookers under its umbrella, said the demand for online air travel plans has fallen significantly, and that it is also struggling with foreign exchange rate challenges.
In its quarterly report, Orbitz said its deals stemming from U.S. air travel fell in the second quarter, which offset the growth that was seen in the company's hotel and vacation packages revenue. Total income for the quarter for $4.6 million, or 4 cents per share, compared with $8.9 million, or 8 cents per share, in the same period last year.
Orbitz shares were down 27 percent to $3.40 each as of 3:43 pm on Wednesday.