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TripAdvisor (TRIP) Misses Q3 Earnings & Revenue Estimates

Zacks Equity Research

TripAdvisor Inc. TRIP reported adjusted third-quarter 2019 earnings of 58 cents per share, missing the Zacks Consensus Estimate of 69 cents. Also, the reported earnings decreased 19.4% from the year-ago quarter.

Revenues in the third quarter were $428 million, missing the Zacks Consensus Estimate by 6.2%. Moreover, the top line was down 6.6% 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 $238 million (accounting for 56% of total revenues) from the Hotels, Media & Platform segment were down 12% from the year-ago quarter.

Revenues of $141 million from the Experiences & Dining segment, which accounted for 33% of total revenues, grew 19% 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 11%. This segment includes revenues from rentals, SmarterTravel, Flights/Cruise and TripAdvisor China. Revenues from this segment were $49 million, down 30% 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 $303 million were down 4.7% from $318 million a year ago. Per the press release, operating margin of 15.9% was also down 350 basis points from the year-ago quarter.

On a GAAP basis, the company’s net income was $50 million or 36 cents per share versus $69 million or 49 cents in the prior-year quarter.

Balance Sheet & Cash Flow

TripAdvisor exited the quarter with cash, cash equivalents and short-term investments of roughly $933 million, down from $966 million recorded in the second quarter. Accounts receivables were $218 million, down from $270 million in the second quarter.

Cash flow from operations was $1 million versus $181 million in the second quarter. Capex was $23 million, up from $21 million in the second quarter.

During the quarter, the company declared a special cash dividend of $3.50 per share and returned approximately $490 million of capital to its shareholders.

Zacks Rank & Stocks to Consider

Currently, TripAdvisor has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Stamps.com Inc. STMP, AMETEK, Inc. AME and Carvana Co. CVNA. While Stamps.com sports a Zacks Rank #1 (Strong Buy), AMETEK and Carvana carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Stamps.com, AMETEK and Carvana is currently projected at 15%, 10.91% and 9%, respectively.

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