Tripadvisor Inc (TRIP) Misses EPS Estimates, Stock Dives

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Tripadvisor Inc (NASDAQ:TRIP) showed off its earnings report for the quarter it calls its second of 2014 this afternoon after the market closed for the day on Wall Street. The company said it earned $0.55 per share for the quarter, up from 52 cents in the same three months of 2013. On today’s market shares in Tripadvisor performed strongly and finished the day at $107.36 million.

Revenue for the three months covered by today’s report came in at $323 million. In the second quarter of 2013 the firm managed to show revenue of $274 million. The five days leading up to the release of this afternoon’s earnings report saw a market that was optimistic about Tripadvisor Inc (NASDAQ:TRIP) appear. The company’s shares have gained strongly since Google revealed a strong ad market last week.

Shares crash on earnings release

Right after investors got their hands on the Tripadvisor second quarter earnings report, the company’s shares lost about 10% of their value in aftermarket trading. The company’s big miss on headline EPS, which was expected to come in at 61 cents per share, appears to have been responsible for the instantaneous loss in value at the company.

Today’s results are by no means a blow to the future of Tripadvisor Inc (NASDAQ:TRIP), but they will likely hurt the momentum of the company’s stock in the short term.

As investors gave themselves time to read the report that negativity was a little more subdued, but the firm’s shares remained well below the price the stock closed at on today’s traditional stock market. The company’s CEO tried toput a positive spin on the numbers in this afternoon’s report.

“We are gaining momentum in 2014. In the second quarter, we saw growth accelerate in total revenues, click based revenues, revenue per hotel shopper and hotel shoppers, a testament to the progress we have made in our core products as well as our adjacent business lines”

Expectations for ads drove Tripadvisor higher

Analysts are looking for Tripadvisor Inc (NASDAQ:TRIP) to put up earnings of 61 cents per share when it reveals its numbers after the market closes on Wednesday afternoon. Consensus revenue estimates show the company earning $322 million in the quarter, which the company refers to as its second of fiscal 2014.

The paid-click ad business is almost traditional when it comes to talking about internet company revenue growth, but it’s expected to be one of the driving forces behind Tripadvisor Inc (NASDAQ:TRIP), at least by those that reckon the company’s set for massive growth in the years ahead. The more than seventy times earnings the firm’s shares currently trade for indicates that many traders are behind it.

Google Inc (NASDAQ:GOOG) performance in recent years, combined with the massive growth in companies like Facebook Inc (NASDAQ:FB), which is also reporting earnings on Wednesday evening, have given investors hope about the future of smaller niche companies in the digital advertising world. Tripadvisor Inc (NASDAQ:TRIP) is one of the many bets on the future growth of digital ads, though it’s a mite riskier than some of the bigger firms out there.


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