TripAdvisor revenue forecast falls short of Wall Street expectations

By Danny King
TripAdvisor’s shares plunged in after-hours trading Wednesday after the the travel-review site said its 2012 earnings would be little changed from 2011.

TripAdvisor said contributing factors are its website redesign, less profitable websites in developing markets and lower payment rates from Expedia, the company that spun off TripAdvisor in December.

TripAdvisor stock plunged 18% in extended trading Wednesday.

TripAdvisor’s 2012 earnings before interest, taxes, depreciation and amortization (EBIDTA) will be “relatively flat,” while its revenue will increase at a percentage rate in “mid- to high teens,” TripAdvisor CFO Julie Bradley said on a conference call with analysts.

At that range, the company’s revenue this year would be about $730-750 million. Analysts in a Thomson Reuters poll estimated 2012 revenue of $759 million.

TripAdvisor boosted international revenue by 55% and continues to launch sites in new countries, where operations are less profitable than in the U.S. and often generate losses in the short term, said CEO Stephen Kaufer.

TripAdvisor’s website redesign took place throughout 2011 and was completed early in the fourth quarter.

“The redesign improves the user experiences, but results in fewer user leads,” Bradley said.

Expedia cut the cost-per-click rate it pays TripAdvisor for leads because “we are no longer a P&L-neutral transaction,” Bradley said.

TripAdvisor on Wednesday said in its first-ever earnings release as a public company that fourth-quarter net income jumped 19% to $22 million, while revenue climbed 30% to $137.8 million.

Follow Danny King on Twitter @dktravelweekly.
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