(By Balachander) Travelzoo Inc. (NASDAQ:TZOO) forecast a drop in third-quarter earnings and revenue and shares of the Internet media company plunged 20.72 percent in premarket trading on Friday.
The New York-based company expects earnings per share in the range of 20 cents to 22 cents on revenue between $35.0 million and $35.5 million. In the year-ago quarter, Travelzoo earned 36 cents a share on revenue of $38.7 million.
The company publishes travel and entertainment deals from travel and entertainment companies, and local businesses in North America and Europe.
Travelzoo also said it is in "active" negotiations to acquire a hotel booking website. "Our hotel commission tests during the third quarter have shown positive results," said CEO Chris Loughlin, "so we are excited about adding, or developing, a hotel booking platform to our deals business."
The company said its expanded hotel offering will allow its subscribers to book deals on any night, at select hotels.
As of June 30, 2012, Travelzoo had a total unduplicated number of subscribers in North America and Europe of 22.1 million.
In the preceding second quarter, Travelzoo earned 45 cents a share on revenue of $39.4 million.
The stock, which has been trading between $19.38 and $34.95 over the past year, closed at $23.50 on Thursday.