Shares of Ctrip.com (NASDAQ:CTRP) have surged today, up by 21% as of 11:45 a.m. EST, after the company reported fourth-quarter earnings results. The China-based travel platform beat expectations for both the top and bottom lines.
Revenue in the fourth quarter came in at $1.1 billion, slightly ahead of the $1.07 billion in sales that the Street was expecting. That translated into non-GAAP earnings per American depositary share (ADS) of $0.13, while analysts were expecting the company to post adjusted losses of $0.03 per ADS. On a GAAP basis, Ctrip lost $0.32 per share. The company said it increased its presence in lower-tier cities, and Ctrip-branded low-star hotel room-nights grew 50%.
"The solid results in the fourth quarter of 2018 ended the year on a strong note," CEO Jane Sun said in a statement. "Over the year, despite various challenges, we focused on developing innovative new products, offering increased support to our suppliers, and most importantly, putting the customer at the center of everything we do."
In terms of outlook, Ctrip expects first-quarter net revenue to grow at 18% to 23%. That should translate into non-GAAP operating income of 1 billion yuan to 1.1 billion yuan ($149 million to $164 million).
On the earnings call, co-founder and Executive Chairman James Liang highlighted ongoing urbanization in China as a key growth driver for 2019 and beyond. Urbanization rates in China are expected to rise from 50% today to 70% to 80% within the next 10 to 20 years, Liang said.
"We talked about there is still a lot of room for growth in terms of urbanization, but on top of that, the Chinese economy has continued to move from necessity goods to experience goods, from manufacturing to service, and from investment to consumption -- in particular, high in consumption," Liang added. "So, all these trends bode very well for the overall industry growth and for Ctrip."