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TripAdvisor (TRIP) Tops Q2 Earnings Estimates, Lags Revenues

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TripAdvisor Inc. (TRIP - Free Report) reported adjusted second-quarter 2018 earnings of 41 cents per share, surpassing the Zacks Consensus Estimate by 2 cents. Also, earnings increased 37% sequentially and 8% from the year-ago quarter.

However, revenues in the second quarter were $433 million, lagging the Zacks Consensus Estimate of $436.1 million.

Following the weaker-than-expected revenues in the second quarter, the share price was down 10.32%.

However, on a year-to-date basis, the stock has outperformed the industry it belongs to. It has gained 48% compared with the industry’s rally of 27.2% in the said period.

 

 

Revenues

TripAdvisor’s quarterly revenues reflect an increase of 14.6% sequentially and 2.1% year over year.

Revenue Segments

TripAdvisor reports revenues under two segments: Hotel and Other.

Revenues of $313 million from the Hotel segment decreased 4% from the year-ago quarter but contributed 73% of the total revenues. This segment includes click, display, subscription and transaction-based revenues from hotels, air and cruise, also including sales from the company’s largest subsidiary, SmarterTravel, as well as from operations in China.

Revenues of $120 million from the Non-Hotel segment increased 22% year over year and contributed the remaining 27% of the total revenues. This segment includes revenues from attractions, restaurants and vacation rental businesses.

Revenues by Source

Revenues of $199 million from Click-based advertising decreased 7% from the year-ago quarter and accounted for 46% of the total revenues. Revenues from Display-based advertising increased 8% year over year to $80 million and brought home 18% of the total revenues. The other hotel revenue component contributed $34 million, down 11% from the year-ago quarter. However, it accounted for 17% of the total revenues.

Important Metrics

User reviews and opinions reached 661 in the quarter and grew 24% year over year.

Average monthly unique visitors grew 10% from the prior-year quarter to approximately 456 million.

Average monthly unique hotel shoppers decreased 3% year over year to approximately 149 million.

Operating Results

TripAdvisor’s adjusted operating expenses of $331 million were flat from the year-ago quarter. Per the press release, operating margin of 11.3% was up 50 bps from the year ago-quarter.

On a GAAP basis, TripAdvisor’s net income was $32 million or 23 cents per share compared with net profit of $27 million or earnings of 19 cents per share.

Balance Sheet & Cash Flow

TripAdvisor exited the quarter with cash, cash equivalents and short-term investments of roughly $678 million, up from $650 million recorded in the last reported quarter. Accounts receivables were $300 million, up from $281 million in the first quarter.

Cash flow from operations was $186 million, increasing from $174 million in the last reported quarter. Capex was $16 million, up from $15 million in the first quarter. Free cash flow was 170 million, down from $204 million in the last reported quarter.

TripAdvisor, Inc. Price, Consensus and EPS Surprise

 

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

Zacks Rank and Other Stocks to Consider

Currently, TripAdvisor sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and Advantest Corporation (ATEYY - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Groupon, IAC/InterActiveCorp and Advantestis currently projected to be 3%, 7.5% and 15.5%, respectively.

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