So what: The company on March 19 announced earnings results that easily beat Wall Street's, and management's, expectations for the fourth quarter. The key driver was a surprising 102% year-over-year gain in transportation ticketing volume, compared to the 60% spike management had forecast. Hotel bookings also rose at a faster pace than expected, up 53% from the prior-year period. Altogether, fourth-quarter sales jumped higher by 33%.
Profitability fell, however, with gross margin shrinking to 69% of sales from 73%. Expenses rose across the board, particularly on product development. Investments in its mobile app and website totaled $127 million, or more than double 2013's amount. Still, despite the heavier spending Ctrip booked a much smaller loss than analysts were bracing for.
Now what: Ctrip.com's new 2015 outlook calls for more accelerating growth. Sales are projected to rise by as much as 50% over 2014's total of $1.2 billion. That would represent a significant increase over last year's impressive 36% sales gain, and it explains why investors were tripping over themselves to jump into the stock last month.
Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Ctrip.com International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.