TripAdvisor Still Clicks With Travelers, Its Q2 Shows

Investor's Business Daily

TripAdvisor (TRIP) late Wednesday reported better-than-expected second-quarter earnings, sending the travel review and metasearch site's shares soaring 14.5%.

Earlier, budget carrier Spirit Airlines (SAVE), which has generated negative reviews from its aggressive fees, showed its model continued to deliver solid growth. Its shares hit a record high.

TripAdvisor earned 46 cents a share on a GAAP basis, up 24% vs. a year earlier and 5 cents above consensus analyst forecasts, according to Thomson Reuters. Non-GAAP EPS grew 27% to 52 cents vs. views for 49 cents.

Revenue rose 25% to $246.9 million vs. views of $236.64 million.

Piper Jaffray analyst Mike Olson hailed "strong overall visitor and hotel shopper growth.

TripAdvisor didn't give a Q3 outlook. CFO Julie Bradley reit erated guidance for 2013 revenue growth "in the low 20s" on the post-earnings conference call.

"Our core hotel shopper growth metric remains strong," CEO Steve Kaufer said on the call. He noted that more than a billion travelers visited TripAdvisor's site in the first half of the year.

Revenue from cost per click (CPC) ads in Q2 surged 21% vs. a year earlier and made up 74% of total revenue. Display-based ad revenue jumped 18%, making up 13% of total revenue. Subscription, transaction and other revenue surged 68% and accounted for 13% of total revenue.

CPC is an online ad model used to direct traffic to websites. Advertisers pay website owners when an ad is clicked.

International revenue was 49% of Q2's total, dipping from Q1 due to TripAdvisor's staggered rollout of hotel metasearch.

TripAdvisor is shifting to a metasearch model or price search tool that lets users directly book hotels and other travel products. This is expected to take the emphasis off CPC ads from hotels and online travel agencies.

Fee To Be

Meanwhile, Spirit Air said Q2 EPS jumped 29% to 63 cents, meeting analyst estimates.

Revenue rose 18% to $407.34 million, roughly in line with estimates for $407.9 million. That was the smallest sales gain in 11 quarters, hurt by Easter's shift this year from April to March.

But it was much better than larger rivals: US Airways (LCC) said Wednesday that revenue rose 3% . Delta's (DAL) revenue was flat.

Spirit shares to a record 36.83 intraday, closing up 1% at 35.42.

"Spirit's low cost, low fare, and high choice strategy is appealing to a growing base of smart value-conscious consumers and we look forward to bringing low fares to more places," CEO Ben Baldanza said in a release.

Travelers have grown accustomed to paying for checking bags and other once-free perks. But Spirit even charges for carry-on bags — $35 if paid while booking or $50 at check-in. Checked bags range from $35 at the time of booking online to $45 at the airport counter. But ultra-low fares continue to attract fliers.

Revenue per available seat mile fell 2.8% to 11.91 cents. Its load factor rose to 85.7% vs. 84.8% a year earlier. The share of seats filled topped 88% in June. Spirit expects even better for July.

Operating costs rose 15.4% to $334.7 million, mainly due to fuel prices and rapid expansion. Capacity rose 21% vs. a year earlier.

Hurricanes remain a risk. Spirit operates heavily in the East Coast and Gulf regions. It's expanded to the Caribbean and Mexico. That exposes it to more potential hurricanes but lessens the impact of any single storm.

View Comments (0)