TripAdvisor (TRIP) was spun out of Expedia (EXPE) in late 2011. (It's probably one of my favorite sites on the interwebs) If you remember, last week we noted the huge reaction to earnings in Expedia; today TRIP is following a similar flight plan. The stock is up 17% in a rough morning for the overall market. With Priceline (PCLN) being one of the hottest stocks of the year, obviously this segment of online travel is really a barn burner in 2012.
IBD takes a closer look:
- TripAdvisor shares were up 17% in after-hours trading Tuesday, after the provider of online travel reviews and more issued results that beat analyst views on an upsurge in ad and subscription revenue. TripAdvisor said it earned 35 cents a share in the first quarter, unchanged from the year-earlier period but 6 cents higher than the average estimate of 17 analysts polled by Thomson Reuters. Excluding items, TripAdvisor said it earned 38 cents a share, also flat with a year earlier but 4 cents higher than analyst estimates.
- Sales jumped 33% to a record $183.7 million, beating analyst forecasts of $174.40 million.
- The company didn't give specific guidance, but Chief Financial Officer Julie Bradley told analysts the company expects 2012 revenue "to trend above the midpoint" of TripAdvisor's earlier guidance calling for growth in the mid- to high-teens. Analysts have forecast 17.5% growth. Its 2011 sales rose 31% to $637 million.
- "We had a strong start to 2012," TripAdvisor CEO Steve Kaufer said in a conference call with analysts. "Our better-than-expected revenue and profit performance was driven primarily by stronger hotel shopper growth, which was up over 30% year-over-year, as well as slightly better (cost per click, or CPC) prices."
- The Newton, Mass.-based company said CPC revenue rose 20% from the year-earlier quarter to $144.9 million. This is revenue it gets each time a site user clicks on ads for a flight, hotel or other travel service. It made up 79% of the company's total revenue in the quarter.
- TripAdvisor, which also provides customer reviews of travel destinations, restaurants and more, said its display ad revenue rose 17%. Subscription and other revenue had the biggest jump of its three breakout segments, surging 67%.
- JPMorgan analyst Doug Anmuth said in an investor note Monday that TripAdvisor got a lift in the quarter from strong travel industry metrics. Market tracker ComScore says the number of U.S. unique visitors to TripAdvisor's site soared 47% in Q1 from the year-earlier quarter, in line with 48% growth in Q4. These figures are way up from a 14% rise in Q3.
- But Anmuth says TripAdvisor's challenges include hotel user growth rates and the impact that Google's rival travel review business might have on TripAdvisor. Anmuth also says that Expedia is reducing its spending for CPC ads on TripAdvisor.
- But Olson says that based on company filings, Expedia's spending with TripAdvisor hasn't fallen as far as expected. And he says other online travel agencies such as Priceline.com are raising their ad spending with TripAdvisor, now that the company isn't under the umbrella of rival Expedia.
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