Despite Revenue Growth, Ctrip.com Shares Sink
- By Omar Venerio
In Thursday trading, Ctrip.com International Ltd.'s (CTRP) stock declined more than 5% on the back of the company reporting its financial results for the second quarter on Aug. 30. The company posted EPS of 22 cents on revenue of $946 million, an increase of 45% from the prior-year quarter. The company beat profit estimates by two cents and beat revenue expectations of $944.8 million.
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The intrinsic value of CTRP
The main driver of revenue was growth in the accommodation reservation and transportation ticketing businesses, driven by the execution of the organic air ticketing business as well as new business units and the implementation of Skyscanner. Skyscanner is the company's "direct booking" business, which provides travelers with a seamless booking experience.
Moreover, packaged tour revenue was $90 million, representing a 29% increase from the same period of 2016 but a 13% decline from the previous quarter. Corporate travel revenue for the second quarter was $29 million, representing a 36% increase from the year-ago quarter due to the expansion in travel product coverage and a 38% increase from the previous quarter.
The revenue growth impacted the gross margin, which was 82% for the second quarter, improving 1,000 basis points from the prior-year quarter and 800 basis points from the previous quarter. The operating margin was 10%. Excluding share-based compensation charges, the non-GAAP operating margin was 18%, much higher than the 4% reported in the comparable quarter of 2016.
CEO Jane Jie Sun said she was pleased with the operating and financial results.
"Ctrip maintained healthy revenue growth and achieved continual improvement in operating efficiency," Sun said. "The group will remain focused on operating fundamentals that create value for our customers and suppliers. We are confident that Ctrip will generate long-term value for shareholders in the years to come."
Guidance is solid for the third quarter of 2017. The company now expects revenue growth of 35% to 40%.
Disclosure : The author holds no positions in any stocks mentioned
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 2 Warning Sign with CTRP. Click here to check it out.
The intrinsic value of CTRP
