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TripAdvisor profit sags as costs jump; shares slide

(Reuters) - 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 percent to $71 in post-market trading as the higher costs ate into a 39 percent 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 percent 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 percent to $159 million (99.34 million pounds).

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

On an adjusted basis, the company reported a profit of 48 cents per share.

At $354 million, revenue exceeded market expectations but earnings lagged.

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

(Reporting by Ankit Ajmera in Bangalore; Editing by Saumyadeb Chakrabarty)