Ctrip.com Q3 Profit Declines, But Results Beat View; Q4 Outlook Disappoints

(RTTNews) - Shares of Ctrip.com International Ltd. (CTRP) declined almost 5 percent in extended trades on Tuesday after the Chinese travel services company forecast revenue growth for the fourth quarter below Street view.

The company also reported a 42 percent decline in profit for the third quarter from last year as higher revenues were offset by an increase in expenses and lower margins. However, both revenue and adjusted earnings per share for the quarter beat analysts' expectations.

Ctrip.com International provides travel service of hotel accommodations, airline tickets, packaged tours and corporate travel management in China.

Commenting on the third-quarter results, James Liang, Chairman and CEO of Ctrip, said, "Accommodation reservation and transportation ticketing services maintained robust growth, reaching 69% and 98% year-over-year in volume respectively. The number of Ctrip mobile app downloads reached 350 million, growing 75% from the previous quarter."

Shanghai-based Ctrip.com reported net income for the third quarter of RMB216.92 million or $35.34 million, down from RMB372.99 million in the prior-year quarter. Earnings per ADS declined to RMB1.38 or $0.22 from RMB2.44 or $0.40 last year.

Excluding share-based compensation charges, adjusted net income for the quarter was RMB353.98 million or $58 million, compared to RMB481.89 million in the prior-year quarter. Earnings per ADS were RMB2.24 or $0.36, compared to RMB3.14 or $0.51 a year ago.

However, total revenues for the quarter increased 38 percent to RMB2.26 billion or $368.11 million from RMB1.64 billion in the same quarter last year.

Net revenues also grew 38 percent to RMB2.13 billion or $346.95 million from RMB1.54 billion in the prior-year quarter.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.20 per share for the quarter on revenues of $335.70 million. Analysts' estimates typically exclude special items.

Ctrip.com's accommodation reservation revenues for the quarter grew 56 percent to RMB950 million or $155 million, primarily driven by a 69 percent increase in accommodation reservation volume, partly offset by a decline in commission per room night.

Transportation ticketing revenues rose 32 percent to RMB800 million or $130 million, reflecting a 98 percent increase in air ticketing sales volume.

Packaged-tour revenues increased 12 percent to RMB358 million or $58 million, driven by an increase of 52 percent in volume of organized tours and self-guided tours. Corporate travel revenues grew 45 percent to RMB104 million or $17 million, reflecting the increased corporate travel demand from business activities.

However, gross margin declined to 72 percent from 75 percent last year, while operating margin plunged to 4 percent from last year's 19 percent.

Looking ahead to the fourth quarter, Ctrip.com forecasts net revenue growth of about 30 percent from the prior year. Analysts expect the company to report 32.5 percent growth in revenues to $315.30 million.

CTRP closed Tuesday's regular trading session at $58.46, down $0.45 or 0.76 percent on a volume of 3.22 million shares. The stock further declined $2.86 or 4.89 percent to $55.60 in after-hours trading.