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TripAdvisor (TRIP) Misses Q2 Earnings & Revenue Estimates

Zacks Equity Research

TripAdvisor Inc. TRIP reported adjusted second-quarter 2019 earnings of 45 cents per share, missing the Zacks Consensus Estimate of 52 cents. However, the reported earnings increased 9.8% from the year-ago quarter.

Revenues in the second quarter were $422 million, missing the Zacks Consensus Estimate of $447 million. Moreover, the top line was down 3% year over year.

Notably, the stock has lost 21.3% compared with the industry’s decline of 17% over the past year.

Revenue Segments

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

Revenues of $254 million (accounting for 60% of total revenues) from the Hotels, Media & Platform segment were down 7%from the year-ago quarter.

Revenues of $125 million from the Experiences & Dining segment, which accounted for 30% of total revenues, grew 28% year over year. The company will likely continue to invest in supply and marketing to accelerate E&D products, and drive attractive returns in the long run.

The Other segment contributed the remaining 10%. This segment includes revenues from rentals, SmarterTravel, Flights/Cruise and TripAdvisor China. Revenues from this segment were $43 million, down 32% from the year-ago quarter.

TripAdvisor, Inc. Price, Consensus and EPS Surprise

 

TripAdvisor, Inc. Price, Consensus and EPS Surprise

TripAdvisor, Inc. price-consensus-eps-surprise-chart | TripAdvisor, Inc. Quote

Operating Results

TripAdvisor’s adjusted operating expenses of $299 million were down 9.7% from $331 million a year ago. Per the press release, operating margin of 15.6% was up 430 basis points from the year ago-quarter.

On a GAAP basis, the company’s net income was $34 million or 24cents per share versus $32 million or 23 cents in the prior-year quarter.

Balance Sheet & Cash Flow

TripAdvisor exited the quarter with cash, cash equivalents and short-term investments of roughly $966 million, up from $811 million recorded in the first quarter. Accounts receivables were $270 million, up from $236million in the first quarter.

Cash flow from operations was $181millionversus $182 million in the first quarter. Capex was $21 million, up from $17 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 Alibaba Group Holding Limited BABA, Teradyne, Inc. TER and eBay Inc. EBAY, 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 Alibaba, Teradyne and eBay is currently projected at 26.8%, 11.4% and 9.4%, respectively.

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