TripAdvisor Profit Falls, But In Line; Shares Down

(RTTNews) - Online travel company TripAdvisor Inc. (TRIP), Tuesday reported a lower fourth-quarter profit, hurt by weak margins as the company continued to expend on sales, technology and content even as it clocked double-digit revenue growth. While quarterly earnings came in line with Wall Street estimates, revenues surpassed expectations.

TripAdvisor shares dropped 6 percent in after-hours trade on the Nasdaq, following the results.

But the results come even as the company managed to attract traffic to its site.

"The fourth quarter capped a strong 2013, as more than two billion unique visitors came to TripAdvisor to be inspired, to conduct research and to plan or share the details of their trip," said CEO Steve Kaufer.

Kaufer said the company has embarked on initiatives to make searches at TripAdvisor site more comprehensive.

For the fourth quarter, the Newton, Massachusetts-based company posted net income of $20 million or $0.14 per share, compared with $33.6 million or $0.23 per share last year.

Excluding items, adjusted earnings for the quarter were $31 million or $0.21 per share, compared with $41 million or $0.29 per share a year ago. On average, 27 analysts polled by Thomson Reuters estimated earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the fourth quarter were up 26 percent at $212.7 million, compared with $169.4 million in the prior year. Twenty-four analysts had a consensus revenue estimate of $205.46 million for the quarter.

During the quarter, TripAdvisor's click-based advertising revenue grew 17 percent from last year, accounting for most of the revenues.

Among smaller business streams, display-based advertising revenue climbed 46 percent, and subscription, transaction and other revenue surged 53 percent.

Revenue from North America grew 22 percent year-over-year, Europe, Middle East and Africa was up 30 percent, Asia Pacific jumped 40 percent, while Latin America was flat.

Meanwhile, revenue from Expedia totaled $46.4 million for the quarter of 2013, up 17 percent from last year. TripAdvisor was spun off from Expedia Inc. (EXPE) in December 2011.

Results for the quarter were largely hit by expenses that escalated to $184 million from $122 million last year.

TripAdvisor stock closed Tuesday at $84.20, up $0.15 or 0.18%, on a volume of 3.4 million shares on the Nasdaq. In after hours, the stock dropped $5.37 or 6.38% at $78.83. In the past year, the stock has trended in a range of $42.04 - $90.43.