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TripAdvisor (TRIP) Misses Q1 Earnings & Revenue Estimates

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TripAdvisor Inc. (TRIP - Free Report) reported adjusted first-quarter 2020 earnings of 7 cents per share, missing the Zacks Consensus Estimate of 12 cents. Also, the reported earnings decreased 81% from the year-ago quarter.

Revenues in the first quarter were $278 million, missing the Zacks Consensus Estimate by 3.6%. Also, the top line was down 26% year over year.

Revenue Segments

Starting first-quarter 2019, TripAdvisor revised the reporting structure into three segments: Hotels, Media & Platform, Experiences & Dining, and Other.

Revenues of $169 million (accounting for 61% of total revenues) from the Hotels, Media & Platform segment were down 33% from the year-ago quarter.

Revenues of $83 million from the Experiences & Dining segment, which accounted for 30% of total revenues, grew 4% year over year. The company will likely continue to invest in supply and marketing to accelerate E&D products, as well as drive attractive returns in the long run.

The Other segment contributed the remaining 9% to total revenues. This segment includes revenues from rentals, SmarterTravel, Flights/Cruise and TripAdvisor China. Revenues from this segment were $26 million, down 38% from the year-ago quarter.

TripAdvisor Inc Price, Consensus and EPS Surprise


Operating Results

TripAdvisor’s adjusted operating expenses of $254 million were down 13.3% from $293 million a year ago. Operating margin was (9.7%) in the first quarter versus 8.2% in the year-ago period.

On a GAAP basis, the company recorded net loss of $16 million or loss of 12 cents per share versus net income of $26 million or earnings of 18 cents in the prior-year quarter.

Balance Sheet & Cash Flow

TripAdvisor exited the quarter with cash, cash equivalents and short-term investments of roughly $798 million, up from $319 million recorded in the fourth quarter. During March, the company borrowed $700 million from the revolving credit facility in a bid to enhance liquidity.

Accounts receivables were $159 million, down from $183 million in the fourth quarter.

Cash flow from operations was ($70) million versus $59 million in the fourth quarter. Capex was $20 million, down from $22 million in the fourth quarter. Free cash flow was ($90) million in the first quarter.

Zacks Rank & Stocks to Consider

Currently, TripAdvisor has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Akamai Technologies, Inc. (AKAM - Free Report) , Inuvo, Inc. (INUV - Free Report) and Shopify Inc. (SHOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Akamai, Inuvo, and Shopify is currently projected at 12.3%, 30% and 25.8%, respectively.

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