Ctrip Stock Struggles After Latest Earnings Announcement
China's biggest provider of travel services, Ctrip.com International Ltd., has seen its stock suffer in recent months despite stronger financial results.
China's biggest provider of travel services, Ctrip.com International Ltd. (Nasdaq: CTRP), has seen its stock suffer in recent months despite stronger financial results.
The travel giant announced a surprising 45-percent spike in sales, the higher end of its managements' expectations, while its gross and operating profit margins increased sharply as well.
Overall, however, investors are not optimistic about Ctrip's future as competition in the industry increases. Ctrip's largest competitor, Tuniu Corp. (Nasdaq: TOUR), faces a difficult 2017 also. Analysts predict that the upcoming year will be a tough one for all online leisure travel companies.
So far, though, Ctrip is riding high. According to the latest quarterly earnings report, Ctrip's net income for the second quarter was RMB 6.6 billion ($946 million), an increase of 45 percent year-on-year, higher than Wall Street analysts' expectation.
Ctrip's second-quarter earnings equaled 20 cents per share. Yahoo Finance's data shows that, if not included in the equity compensation costs, Ctrip's second-quarter diluted earnings per ADR was RMB 1.49 (about 22 cents).
"We are pleased with the strong operating and financial results in the second quarter," CEO Jane Sun said in a statement.
Sun also estimated the revenue expansion rate was likely to remain at about 35-40 percent, which looks strong. but would be the slowest growth forecast in two years by the company.