What happened

Shares of TripAdvisor Inc. (NASDAQ:TRIP) were pulling back today after the travel services company reported another underwhelming earnings report and gave weak guidance.

As of 11:18 a.m. EDT, the stock was down 6.9%.

A person wearing a backpack standing on the edge of a muddy lake surrounded by tropical plants.

Image source: Getty Images.

So what 

TripAdvisor continues to struggle with its transition into travel bookings from a strictly travel recommendations site. Revenue in the quarter increased 8% to $424 million, and ticked up just 3% in the key hotel segment, its biggest. That result missed analyst estimates at $431 million.

On the bottom line, meanwhile, adjusted earnings per share were unchanged from a year ago at $0.38, which beat estimates at $0.30. Share buybacks during the period helped boost EPS as adjusted net income was down 5% in the quarter. 

CEO Steve Kaufer said that the company "successfully launched our streamlined hotel shopping experience and our new, multi-year brand advertising campaign" and that it has "seen some nice early signs." He also noted that click-based revenue has started growing again.

Now what

Despite Kaufer's optimism, a shift to lower-value mobile traffic and increased competition continue to weigh on TripAdvisor's earnings growth. As a result, management lowered its guidance for the year, saying it now expects mid-single-digit growth in click-based and transaction revenue, down from a previous forecast for growth in the double digits, and said overall revenue would be slightly better, compared to a previously given range of double-digit improvement. 

The stock approached a four-year low on the news as performance has consistently disappointed. While some continue to expect a turnaround, with profits still falling and only modest revenue growth, it seems like it's too early to bet on a comeback.

 

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends TripAdvisor. The Motley Fool has a disclosure policy.