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TripAdvisor (TRIP) Q4 Earnings Miss Estimates, Revenues Beat

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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%.


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 - Free Report) 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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