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TripAdvisor (TRIP) Q4 Earnings Miss Estimates, Revenues Beat

TripAdvisor Inc.TRIP reported adjusted fourth-quarter 2017 earnings of 6 cents per share, missing the Zacks Consensus Estimate by 9 cents.

Also, the bottom line decreased 63% from the year-ago quarter and 84% sequentially. However, revenues of $321 million surpassed the Zacks Consensus Estimate of $311 million.

Following the earnings release, the share price was up 4.1%.

However, the stock has underperformed the industry it belongs to in a year's time. The company has lost 9.7% against the industry 's rally of 60.9%.

Revenues

TripAdvisor's quarterly revenues reflect a decrease of 26.9% sequentially but an increase of 1.6% year over year.

Revenue Segments

TripAdvisor reports revenues under two segments: Hotel and Other.

Revenues of $244 million from the Hotel segment decreased 3% from the year-ago quarter but made up 76% of the total revenues. This segment comprise click, display, subscription and transaction-based revenues from hotels, air and cruise including that from the company's largest subsidiary, SmarterTravel as well as from operations in China.

Revenues of $77 million from the Non-Hotel segment increased 20% year over year and contributed to the remaining 24% of the total revenues. This segment includes revenues from attractions, restaurants and vacation rental businesses.

Revenues by Source

Revenues of $137 million from Click-based advertising decreased 11% compared with the year-ago quarter and accounted for 43% of the total revenues. Revenues from Display-based advertising increased 12% year over year to $77 million and brought home 24% of the total revenues. The other hotel revenue component was $30 million, up 3% from the year-ago quarter. However, it accounted for 10% of the total revenues. Non-Hotel revenue component contributed to the remaining 24%, accounting for $77 million in revenues, up 20% year over year.

Operating Results

TripAdvisor's adjusted operating expenses of $267 million increased 2% year over year. The adjusted operating margin of 2.8% was down 40 bps from the year ago-quarter.

On a GAAP basis, TripAdvisor's net loss was $84 million or 60 cents per share against net profit of $1 million or earnings of 1 cent per share.

Balance Sheet & Cash Flow

TripAdvisor exited the quarter with cash, cash equivalents and short-term investments of roughly $708 million, down from $763 million in the prior quarter. Accounts receivables were $230 million, decreasing from $254 million last quarter.

Long-term debt was $230 million in the fourth quarter compared with $265 million in the previous quarter.

Cash flow from operations was $18 million, increasing from ($135) million in the previous quarter. Capex was $15 million, flat from the prior quarter. Free cash flow was $3 million, increasing from ($150) million in the previous quarter.

TripAdvisor, Inc. Price, Consensus and EPS Surprise

TripAdvisor, Inc. Price, Consensus and EPS Surprise | TripAdvisor, Inc. Quote

Zacks Rank and Stocks to Consider

TripAdvisor has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the technology sector are PetMed Express PETS , Teradyne TER and Mercadolibre MELI . While PetMed and Teradyne sport a Zacks Rank #1 (Strong Buy), Mercadolibre carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Long-term earnings per share growth rate for PetMed, Teradyne and Mercadolibre is projected to be 10%, 12% and 25%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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