The Business Times

TripAdvisor profit sags as costs jump; shares slide

Published Tue, Nov 4, 2014 · 11:54 PM
Share this article.

[BANGALORE] Travel review website TripAdvisor Inc reported a quarterly profit that missed analysts estimates by a wide margin as marketing costs jumped by nearly two-thirds and referral revenue lagged the company's expectations.

TripAdvisor shares fell 15 per cent to US$71 in post-market trading as the higher costs ate into a 39 per cent rise in revenue.

Chief executive officer Steve Kaufer added that lower-than- expected click-based revenue growth partially offset gains made from the purchase of travel booking website Viator in July.

The company relies heavily on click-based advertising, which made up 70 per cent of its total revenue in the latest quarter.

TripAdvisor makes money when a user clicks through to a third-party booking site.

The company launched a major advertising campaign in the third quarter, driving selling and marketing costs up 64 per cent to US$159 million.

The company's net income fell to US$54 million, or 37 US cents per share, for the third quarter ended Sept 30, from US$56 million, or 38 US cents per share, a year earlier.

On an adjusted basis, the company reported a profit of 48 US cents per share. At US$354 million, revenue exceeded market expectations but earnings lagged.

Analysts had expected earnings of 60 US cents per share on revenue of US$348.8 million, according to Thomson Reuters I/B/E/S.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to



Get the latest coverage and full access to all BT premium content.


Browse corporate subscription here