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TripAdvisor Shares Tumble Despite Higher Q4 Profit, Share Buyback Program

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Shares of TripAdvisor, Inc. (TRIP: Quote) tumbled more than 10 percent in extended trade Wednesday despite the online travel company reporting a 52 percent increase in profit for the fourth quarter on better-than-expected revenues. The company also announced a $250 million share repurchase program.

However, the company reportedly said later in a conference call that its sales and marketing expenditure would increase at a faster pace than revenues in fiscal 2013.

TripAdvisor was spun off from online travel company Expedia, Inc. (EXPE) in December 2011 and operates independently of Expedia.

Steve Kaufer, President and CEO of TripAdvisor said, "The fourth quarter capped an exciting year during which we reinforced our importance in the travel-planning funnel. We deepened our social and personalization initiatives, grew our member and content base rapidly and innovated our product offerings, including introducing a new meta experience on smartphones."

TripAdvisor's click-based advertising revenue for the quarter grew 24 percent from the year-ago period to $123.8 million and represented 73 percent of total revenue.

Display-based advertising revenue declined 3 percent to $22.3 million and represented 13 percent of total revenue. Revenue from subscription and other surged 56 percent to $23.3 million.

U.S. revenues for the quarter totaled $83.8 million, and represented 50 percent of total revenue. Revenues from the U.K. Totaled $22.2 million, and accounted for 13 percent of total revenue. Revenues from the rest of the world totaled $63.4 million, and represented 37 percent of total revenue.

Related-party revenues from Expedia increased 6 percent from last year to $39.5 million.

Newton, Massachusetts-based TripAdvisor's net income for the fourth quarter increased to $33.58 million or $0.23 per share from $22.02 million or $0.16 per share in the year-ago period.

Adjusted net income was $41.31 million or $0.29 per share, compared to $32.79 million or $0.24 per share in the same period last year. On average, twenty two analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 23 percent to $169.39 million from $137.80 million in the year-ago quarter. Analysts had a consensus revenue estimate of $167.05 million.

According to comScore, TripAdvisor's travel community averaged more than 50 million monthly unique visitors in the fourth quarter.

For fiscal 2012, TripAdvisor's net income rose to $194.07 million or $1.37 per share from $177.68 million or $1.32 per share in the prior year. Adjusted net income was $218.67 million or $1.54 per share, compared to $198.46 million or $1.46 per share in the previous year.

Revenue for the year increased 20 percent to $762.97 million from $637.06 million last year.

Analysts expected the company to earn $1.51 per share for the year on revenues of $760.19 million.

The company's board of directors has authorized up to $250 million of share repurchases, to be funded by available cash and future cash from operations.

TripAdvisor's CEO Kaufer reportedly said later in a conference call that the company expects sales and marketing expenditure as a percent of revenue to increase from the mid-30s to the low-to-mid 40s throughout 2013.

Meanwhile, CFO Julie Bradley said that full-year revenue percentage growth and click-based revenue growth would be in the "low 20s."

TRIP closed Wednesday's trading at $46.90, up $0.24 or 0.51 percent on a volume of 2.63 million shares. However, in after-hours, the stock declined $4.90 or 10.45 percent to $42.00.

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by RTT Staff Writer

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