Expedia Inc, the largest U. S. online travel agency, reported a quarterly profit on Thursday that surpassed expectations on a 26 percent gain in travel bookings and added that it would pay a 7-cent-per-share quarterly dividend.

However, its shares fell by 8.5 percent to $20.35 on Nasdaq on concerns that Expedia's new dividend policy hints at slower growth prospects, despite of the positive reverberations from the company.

Expedia witnessed its fourth-quarter net profit to touch $102.2 million, or 35 cents per share, compared with a loss of $2.76 billion, or $9.62 per share, a year earlier when the company took a large accounting charge.

Expedia said in statement that the dividend will be paid to stockholders of record as of the close of business on March 11 with a payment date of March 31. This quarterly dividend will amount to about $20 million.

In addition, the net income reported was $89.1 million or $0.30 per share, compared to $64.9 million or $0.22 per share in the year ago quarter. However, 18 analysts polled by Thomson Reuters speculated the company to fetch $0.29 per share earnings for the quarter. Analysts' estimates typically exclude special items.

The travel industry has been the hard hit in the last year by an economic downturn that suppressed travel demand. Online travel companies responded by slashing fees and offering promotions to bolster bookings.