Tag Archives: trip

Q4 Earnings Beat For Chinese Online Travel Firm Ctrip.com

Leading Chinese online travel agency Ctrip.com beat Wall Street estimates in Q4 but missed on Q1 guidance, sending the stock down Thursday. Fourth-quarter revenue jumped 50% from a year earlier to $444 million, the company reported , ahead of analysts’ average expectation of $438 million, in a Thomson Reuters poll. “Our philosophy is to underpromise and overdeliver,” Ctrip.com Chief Financial Officer Cindy Xiaofan Wang said. “It was another very strong quarter and it concludes the exciting year of 2015.” Earnings per American Depositary Share on a GAAP diluted basis were 3 cents, or RMB 0.19, better than the slight loss expected in Thomson Reuters’ analyst poll. ( Excluding share-based compensation charges (non-GAAP), Ctrip’s diluted earnings per ADS were 11 cents for the quarter.) Ctrip shares were down 0.4% near 42.50 in afternoon trading on the stock market today , after diving as low as 39.52 in the morning. Ctrip.com has an IBD Composite Rating of 84, where 99 is the highest. Ctrip.com guidance for the current quarter misses the average view of analysts polled by Thomson Reuters. In a statement accompanying the earnings results, the company said its top line would grow between 75% and 80% in Q1 2016, “reflecting the consolidation of Qunar’s financial results.” Goldman Sachs analyst David Jin called the Q1 guidance “soft” but maintained his buy rating with a price target of 55. A Ctrip share trade in October with Chinese Internet company Baidu ( BIDU )   gave Baidu a greater role in the online travel industry, as China Internet companies position for growth from the online-to-offline, or O2O, services niche. The share-swap deal gave Ctrip.com a larger stake in  Qunar Cayman Islands ( QUNR ), which also reported earnings on Wednesday. Qunar stock was up about 1.9% near 36.20 in afternoon trading Thursday. “The deal will help the whole industry have a chance to achieve long-term profitability,” Xiaofan Wang said. “In the past, competitors have lost tons of money to compete for market share.” Alibaba Group ( BABA ) and Tencent Holdings ( TCHEY ), which reported earnings Thursday morning , have become early players in that field. American online travel giants such as TripAdvisor ( TRIP ) and  OTA giant Priceline ( PCLN ) assuaged Wall Street’s concerns about a slowing global economy — neither firm reported a material impact from the signs of a slowdown. Though rival  Expedia ( EXPE ) missed Wall Street expectations for Q4, the company’s executives also said they were not seeing a slowdown — but the strong dollar has continued to weigh heavily on its results. That may change in the future, Expedia executives said. RELATED:   3 Chinese Internet Stocks Make Moves After Earnings .

Priceline Eases Fears Of Global Travel Slowdown, As Did Rivals

Priceline ( PCLN ) stock surged Wednesday after the company reinforced recent statements from online travel rivals Expedia and TripAdvisor that the global economic slowdown was not having a big impact on its business. Priceline also posted Q4 earnings and revenue above Wall Street estimates. Its Q1 sales guidance met views, but its EPS outlook missed at the midpoint. The company said that it expects Q1 sales to rise 9% to 16%, where Wall Street estimates 12.5% growth. The company sees earnings per share ex items rising 10% to 18%, where analysts have modeled 18% growth, to $9.62. Q4 sales rose 9% from the year-earlier quarter to $2 billion, modestly beating Wall Street’s expectations of $1.95 billion. But, as in some past quarters, Priceline’s earnings shattered expectations. The company posted earnings per share minus items of $12.63, up 16% and 83 cents above the consensus estimate of $11.80 by analysts polled by Thomson Reuters. Priceline stock gapped up more than 12% at the open on the stock market today and was up 11%, near 1,235, in afternoon trading Wednesday. Shares have recouped nearly all their losses in the tough 2016. Priceline has an IBD Composite Rating of 77, where 99 is the highest. Expedia stock was up 5% in afternoon trading Wednesday, while TripAdvisor was up 3%. Priceline’s Q4 earnings are hot off the heels of rivals Expedia ( EXPE ) and TripAdvisor ( TRIP ), which both reported last week. TripAdvisor with Q4 EPS and sales that beat expectations, and Expedia with its executives’ comments, eased fears that a slowing global economy was hurting the online travel industry. And in their Q4 earnings conference call, Expedia executives said that currency would be less of  a factor. Priceline’s $12 billion in Q4 also beat analyst estimates. RBC Capital Markets analyst Mark Mahaney said that lower airline fares — thanks to lower oil prices — and lower foreign exchange costs helped travel. Mahaney reiterated his outperform rating on Priceline stock, with a 1,700 price target. On the company’s Q4 earnings conference call with analysts, Priceline CEO Darren Huston praised his workforce. “Being a leader on online travel and building an experienced marketplace isn’t achieved by simply electronically connecting demand with supply,” Huston said on the call. “It may be a surprise to some, but about two-thirds of our employees are working in either the supply or customer service organizations. “The hard work of making this a daily reality is achieved by thousands of dedicated and energetic people around the world having these properties and then working with our partners on an ongoing basis to ensure that our customers have the most choices of places to stay at the best prices available.” Priceline’s ad costs, though, top personnel costs. The company said that its total personnel costs for Q4, including stock options, rose 14% to $312.8 million. The firm said that it spent $582 million on online advertising during the quarter, up 16% from $500 million in the year-earlier quarter. Analyst ‘More Positive’ About Priceline Outlook RBC is “incrementally more positive” on the stock, Mahaney wrote in a research note following the earnings release. He added that both growth and profitability remained strong. “We are more confident that Priceline will generate accelerating growth in 2016,” he wrote, “Thanks in part to foreign exchange stabilization, but also thanks in part to material new growth opportunities that Priceline has been investing in for years.” Mahaney reiterated his thesis from his earnings preview note that Chinese global travel, Latin America, business travel and alternative accommodations would drive Priceline growth. “Alternative accommodations” refers to hotel-like units available via the so-called “sharing economy.” San Francisco-based Airbnb is among the new breed of companies that lets people rent their homes, or just rooms in their homes, to travelers. Investors have valued the privately held Airbnb at more than $20 billion — though the Wall Street Journal and others have recently attacked such lofty valuations for failing to assess the value of shares properly. The WSJ reported that even sophisticated investors such as mutual funds have trouble accurately judging the value of such startups and have had to write down several investments from tech unicorns such as Dropbox and Uber. Priceline’s market valuation is near $64 billion, by far the highest among the 11 companies in IBD’s Leisure-Travel Booking industry group. No. 2 Expedia has a market cap under $17 billion. In the past, Mahaney has called Priceline “well hedged” against the fast rise of alternative accommodations providers such as Airbnb and Expedia-owed HomeAway. Though Expedia executives have said that alternative accommodations have not yet had a “material” impact on its bottom line, Expedia CEO Dara Khosrowshahi recently  told IBD that Airbnb has clearly “grown up” and that the brand has “clearly rung a bell for customers.”  

Paris Terrorist Attacks Likely To Impact Priceline Q4 Earnings

Online travel agency giant Priceline Group ( PCLN ) is set to report its Q4 earnings on Wednesday before the market open, with the global economy in focus. Analysts polled by Thomson Reuters are expecting single-digit sales and earnings gains. The top line is estimated to grow nearly 6% from the year-earlier quarter, to $1.95 billion. Earnings per share minus items are expected to rise almost 9% to $11.80. Priceline stock is up more than 4% in afternoon trading on the stock market today , near 1,106. The company has an IBD Composite Rating of 72, in which 99 is the highest. Like most stocks, Priceline has had a tough year since touching a record high above 1,476 in November. Priceline stock hit a 29-month low of 954 last week. Online travel rival Expedia ( EXPE ) last week said the terrorist attacks in Paris last year did have an impact on Q4 earnings results. Expedia executives, however, said they were confident that foreign exchange would be less of a factor in 2016, which eased investor worries as travel stocks rose. TripAdvisor ( TRIP ), a travel reviews site, last week also released better-than-expected Q4 earnings , further bolstering the sector. But, RBC Capital Markets analyst Mark Mahaney says several factors will contribute to Priceline’s growth in Q4 being “less than usual.” The terrorist attack on Paris in November likely hurt revenue, he wrote in a research note Feb. 12, and Web traffic is slightly lower. Still, Mahaney says that Wall Street estimates are “reasonable.” Citing data from Smith Travel Research, Mahaney wrote that the hotel industry has experienced slightly negative occupancy rates and other key metrics. For Q4, Mahaney forecasts an 8% decline in U.S. bookings but a 23% rise in international bookings. The profit margins of earnings before interest, taxes, depreciation and amortization (EBITDA) might continue to fall, he says. Mahaney reiterated RBC’s price target of 1,700 on Priceline stock, citing three new areas of growth: outbound travel from China and (to a lesser extent) Latin America, and growth in vacation rentals and alternative accommodations. San Francisco-based privately held Airbnb — which investors have valued at over $20 billion (Wall Street values Priceline at over $54 billion) — has pioneered the alternative accommodations category, but as of late has been criticized for its approach to new markets. Critics say “begging for forgiveness vs. asking permission” is an expensive strategy that is unsustainable in the long term. Airbnb spent more than $8 million in San Francisco to fight legislation that would have further tightened regulations targeting firms such as itself and Expedia-owned HomeAway, which also is in the alternative accommodations business. Priceline and Expedia have taken note of Airbnb’s success and are building up competitive offerings.