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TripAdvisor’s Q1 Earnings Beat Estimates, Revenues Come Up Short

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Mixed Q1 results

On May 7, TripAdvisor (TRIP) reported mixed results for the first quarter. Its top line fell short of Wall Street analysts’ consensus estimate, but the bottom line surpassed the estimate. The online travel agency posted adjusted EPS of $0.36 for the first quarter, which came in ahead of analysts’ estimate of $0.31.

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The company’s quarterly earnings also increased 20% on a YoY basis. The YoY bottom-line growth was mainly driven by reduced expenses and lower taxes, partially offset by a weak top-line performance.

TripAdvisor’s revenues for the first quarter inched down 1% YoY to $376 million as the weakness in the Hotels, Media & Platform business more than offset the benefit of higher revenues from the Experience & Dining business. The total revenues also fell short of analysts’ forecast of $386.8 million.

Due to efficient cost management, TripAdvisor lowered its costs and expenses to $345 million from $355 million in the year-ago quarter. Moreover, TripAdvisor’s total costs and expenses as a percentage of revenues fell by 210 basis points YoY to 91.8%.

Lower costs led to an improvement of 300 basis points in the company’s first-quarter adjusted EBITDA margin. The adjusted EBITDA margin was 24% compared to 21% in the first quarter of 2018. In absolute terms, the total adjusted EBITDA rose 11% YoY to $89 million.

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Fiscal 2019 outlook update

TripAdvisor also updated its outlook for full-year 2019. The company reaffirms its double-digit adjusted EBITDA growth guidance for the year.

The online travel booking agency anticipates the adjusted EBITDA for its Hotels, Media & Platform segment to grow in the double-digit range and the business unit’s revenue trends to improve in the second half of the year. TripAdvisor forecast positive adjusted EBITDA for its Experience and Dining segment.

Among other major online travel agencies, Expedia (EXPE) reported an adjusted loss of $0.27 per share for the first quarter last week. Booking Holdings (BKNG) and Ctrip.com International (CTRP), which plan to report results in a few days, are projected to witness YoY EPS falls of 6.1% and 53%, respectively.

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