) reported adjusted first-quarter 2014 earnings of 48 cents per
share, beating the Zacks Consensus Estimate by a couple of cents.
This is the sixth consecutive positive earnings surprise by the
company. The adjusted earnings per share exclude one-time items but
include stock-based compensation expense.
TripAdvisor reported revenues of $281.0 million in the first
quarter, up 31.9% sequentially and 22.2% from the year-ago period,
driven by continued strong hotel shopper growth, increased ad rates
and strength across product suite. However, the first-quarter
revenues were slightly below the Zacks Revenue Estimate of $282.0
Revenues by Product
were $207.0 million, up 16% from the year-ago quarter and
represented 74% of total revenue. Revenues from
were $32.0 million, up 28% year over year, and accounted for 11% of
Subscription, transaction and other
revenues totaled $42.0 million, up 62% year over year, and
contributed 15% to total revenue.
Revenues by Geography
Geographically, on a year-over-year basis, the Americas (North
America and Latin America) revenues increased 20.0% to $156.0
million, representing 56.0% of total revenue. Revenues from the
EMEA (Europe, Middle East and Africa) increased 27% to $90.0
million and contributed 32% of total revenue, while revenues from
the Asia-Pacific region increased 30.0% to $35.0 million,
representing 12.0% of total first-quarter revenue.
TripAdvisor reported operating expenses of $185.0 million, up
30.3% from $142.0 million incurred in the year-ago quarter. Selling
& marketing expense and technology & content expenses were
up as a percentage of sales from the year-ago quarter, while
general & administrative expenses declined. The net result was
a GAAP operating margin of 34.2% compared with 38.3% in the
Reported pre-tax income was $94.0 million, down from $84.0
million in the year-ago quarter. Pre-tax margin was 33.5%, down 300
basis points (bps) year over year.
On a GAAP basis, TripAdvisor recorded a net profit of $68.0
million or 47 cents per share compared with $62.0 million or 43
cents per share in the year-ago quarter.
TripAdvisor generated adjusted net profit of $69.5 million
compared with $62.7 million in the year-ago quarter. Pro-forma
earnings came in at 48 cents per share compared with 43 cents in
the year-ago quarter.
Balance Sheet & Cash Flow
TripAdvisor exited the first quarter with cash, cash equivalents
and short-term investments of approximately $461.0 million versus
$482.4 million in the prior quarter. Accounts receivables were
$151.0 million, up from $97.0 million in the prior quarter.
Cash flow from operations was $109.0 million versus $71.2
million in the year-ago quarter. Capex was $20.0 million versus
$16.1 million in the year-ago quarter. Free cash flow was $89.0
million versus $55.1 million in the prior quarter.
During the quarter, the company did not repurchase any
TripAdvisor, Inc. is an online travel research company, which
continues to witness robust top-line growth in every quarter. The
company delivered a decent first quarter, with earnings exceeding
the Zacks Consensus Estimate, on the back of improved global travel
We are encouraged by the company's strong fundamentals, strong
focus on improving its mobile products, expansion into
international restaurant reservation space and improvement in
traffic and hotel shoppers in the quarter. Moreover, the company's
launch of meta-display platform last year helped the company to
increase the AD rates, thereby expanding revenues.
Additionally, TripAdvisor's recent purchase of Vacation Home
Rentals and Tripbod will boost its travel product portfolio with
the addition of more properties at famous destinations. The company
will now feature more than 550,000 rental properties worldwide.
However, lack of visibility, increasing competition from
), which is expected to enter the online travel market very soon,
may weigh on the shares 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 #2 (Buy).
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