TripAdvisor Inc. ( TRIP ) reported
adjusted fourth-quarter 2012 earnings of 24 cents per share,
beating the Zacks Consensus Estimate of 23 cents on higher
revenues. Adjusted earnings per share exclude one-time items but
include stock-based compensation expense.
TripAdvisor reported revenues of $169.4 million in the fourth
quarter, up 22.9% from the year-ago period. Related-party revenues
from ExpediaInc. ( EXPE ) totaled $39.5
million, up 6% year over year.
Revenues by Product
Revenues from Click-based advertising totaled
$123.8 million, up 24% from the year-ago quarter and representing
73% of the total fourth-quarter revenues. Revenues from
Display-based advertising totaled $22.3 million,
down 3% year over year and representing 13% of total revenue and
revenues from Subscription, transaction and other
totaled $23.3 million, up 56% year over year and constituting 14%
of total revenue.
Revenues by Geography
Geographically, on a year-over-year basis, Americas grew 16.0%
and represented 50.0% of revenues. UK grew 14.0%, accounting for
13.0% of revenues, while revenues from the rest of the world
totaled $63.4 million, up 37.0%, representing 37.0% of total
TripAdvisor reported operating expenses of $111.8 million, up
27.8% from $87.5 million incurred in the year-ago quarter. Selling
and marketing and technology and content expenses were both up as a
percentage of sales from the year-ago quarters, while general and
administrative expense declined. The net result was a GAAP
operating margin of 27.7% compared with 24.4% in the year-ago
Reported pre-tax income was $43.3 million, up from $33.5 million
in the year-ago quarter. Pre-tax margin grew 130 basis points year
over year to 25.6%.
On a GAAP basis, TripAdvisor recorded a net profit of $33.6
million or 23 cents per share compared with $22.0 million or 16
cents per share in the year-ago quarter.
TripAdvisor generated adjusted net profit of $34.4 million
compared with $25.7 million in the year-ago quarter. Pro forma
earnings per share came in at 24 cents compared with 19 cents in
the last quarter.
Balance Sheet & Cash Flow
TripAdvisor exited the fourth quarter with cash, cash
equivalents and short-term investments of approximately $486.4
million versus $183.5 million in the year-ago quarter.
Cash flow from operations was $71.1 million versus $26.2 million
in the year-ago quarter. Capex was $8.7 million versus $5.3 million
in the year-ago quarter. Free cash flow increased 199% year over
year to $62.4 million.
During the quarter, the company's board of directors authorized
up to $250 million of share repurchases to be funded by available
cash and future cash from operations.
TripAdvisor, Inc. is an online travel research company, which
continues to witness rapid top-line growth in every quarter. The
company delivered a decent fourth quarter, with both earnings and
revenues above the prior year figures, helped by a stronger travel
market all over the world,
Though we are encouraged by the company's strong fundamentals
and improvement in traffic and hotel shopper growth in the quarter,
management states that the new investment in a brand marketing
campaign will impact revenues and earnings before interest, taxes,
depreciation and amortization (EBITDA) growth in the near term.
We believe that the opportunity in the Asia-Pacific region is
significant and is likely to remain one of the strongest drivers of
the company's business over the next few quarters, particularly
since online penetration in many Asia/Pacific markets remains
However, lack of visibility and macro uncertainty may keep the
share price range bound in the near term. Over the long term,
TripAdvisor is well positioned for growth, given its expanding user
base, improving margins and increasing monetization of social and
Currently, TripAdvisor has a Zacks Rank #3 (Hold). Other stocks
in the sector that have been performing well and are worth a look
include Autodesk Inc. ( ADSK ) and
Netflix Inc. ( NFLX ), both with a
Zacks Rank #2 (Buy).AUTODESK INC (ADSK): Free Stock Analysis ReportEXPEDIA INC (EXPE): Free Stock Analysis ReportNETFLIX INC (NFLX): Free Stock Analysis ReportTRIPADVISOR INC (TRIP): Free Stock Analysis
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