TRIPV Tripadvisor, Inc. (MM)

TripAdvisor Inc. said slipping hotel revenue and climbing expenses pressured third-quarter results, which failed to meet Wall Street projections for sales.

Hotel sales slid to $320 million from $340 million during the same period a year earlier. The segment represented some 76% of total revenue.

Meanwhile, expenses crept up 8.6% to $355 million. Marketing costs were among the leading culprits, climbing 6.7% to $210 million. Marketing costs seem likely to continue to rise in coming quarters as the company pushes to "earn users' trust as their booking site of choice," with more promotions and targeted email campaigns, among other efforts.

"Now that we have our transaction products in place, and we have been able to learn and improve, our 2017 focus will shift to reaccelerating revenue growth in our hotel business, and we believe paid marketing channels will play an important role," the company said.

For the quarter, the company reported a profit of $55 million, or 37 cents a share, down from $74 million, or 51 cents a share, a year earlier. Excluding certain items, profit per share was flat at 53 cents.

Revenue rose 1.4% to $421 million, pressured by a 10% slide in TripAdvisor-branded click-based and transaction sales to $206 million from $228 million a year earlier.

Analysts projected 52 cents in adjusted earnings per share and $436.3 million in revenue, according to Thomson Reuters.

TripAdvisor added that it expected margins for adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, would be lower next fiscal year compared with 2016. For the first nine months of the year, the Ebitda margin in 2016 sank to 25% from 32% during the same period a year earlier.

Shares, which have fallen 18% in the past 18 months, tumbled 13% after hours to $55.

The online travel company, spun off in 2011 from now-rival Expedia Inc., operates sites including Jetsetter.com, tour and activity booker Viator.com, and restaurant-reservation site TheFork.com in addition to its namesake site, which is known for users' hotel reviews.

As competition heats up from sites ranging from Kayak to Airbnb Inc., TripAdvisor has been trying to beef up its offerings while spending more on advertising.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

November 08, 2016 18:05 ET (23:05 GMT)

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