TripAdvisor (TRIP) Lags Q4 Earnings Estimates, Tops Revenues

TripAdvisor Inc. (NASDAQ:TRIP) reported adjusted fourth-quarter 2018 earnings of 27 cents per share, missing the Zacks Consensus Estimate by 3 cents. The reported earnings decreased 62.5% sequentially but increased 350% from the year-ago quarter.

Revenues in the fourth quarter were $346 million, surpassing the Zacks Consensus Estimate by 0.49%. The top line was up 7% year over year but down 24% sequentially.

During the quarter, the company recorded a year-over-year increase in average monthly unique visitors and revenue per hotel shopper. However, average monthly unique hotel shoppers decreased from the year-ago quarter.

Notably, the stock has gained 39.8% against its industry’s decline of 6% over the past year.

Revenue Segments

TripAdvisor reports revenues under two segments: Hotel and Other.

Revenues of $240 million (accounting for 69% of its total revenues) from the Hotel segment decreased 2% from the year-ago quarter. This segment includes click, display, subscription and transaction-based revenues from hotels, air and cruise. It also comprises sales from the company’s largest subsidiary, SmarterTravel, as well as operations in China.

Revenues of $106 million from the Non-Hotel segment increased 38% year over year and contributed the remaining 31% of its total revenues. This segment includes revenues from attractions, restaurants and vacation rental businesses.

Revenues by Source

Revenues of $139 million (accounting for 40% of the total revenues) from Click-based and transaction increased 1% from the year-ago quarter. Revenues from Display-based advertising remained flat year over year at $77 million and brought home 22% of the total revenues. The other hotel revenue component contributed $24 million, which was down 20% from the year-ago quarter.

Important Metrics

Average monthly unique visitors grew 2% from the prior-year quarter to approximately 490 million.

Average monthly unique hotel shoppers decreased 11% year over year.

Operating Results

TripAdvisor’s adjusted operating expenses of $273 million were up 2.2% from $267 million a year ago. Per the press release, operating margin of 6.6% was up 380 basis points from the year ago-quarter.

On a GAAP basis, the company’s net income was $7 million or 5 cents per share versus net loss of $84 million or 60 cents in the prior-year quarter.

Balance Sheet & Cash Flow

TripAdvisor exited the quarter with cash, cash equivalents and short-term investments of roughly $670 million, up from $663 million recorded in the last reported quarter. Accounts receivables were $212 million, down from $237million in the third quarter.

Cash flow from operations was $31 million, increasing from $14 million in the last reported quarter. Capex was $16 million, up from $15 million in the third quarter.

Zacks Rank & Other Stocks to Consider

Currently, TripAdvisor has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Expedia Group, Inc. (NASDAQ:EXPE) , AMETEK, Inc. (NYSE:AME) and Inphi Corporation (NYSE:IPHI) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Expedia, AMETEK and Inphi is projected to be 13.4%, 9.6% and 18.5%, respectively.

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