Feb. 3, 2010 (Chinavestor) The largest Chinese online travel agency Ctrip.com (NASDAQ:CTRP) reported fourth quarter earnings on Tuesday after the close. While numbers for the current quarter look good, revenue guidance for 2010 first quarter came out below analysts' expectations. The stock lost -5.45% in after market trading spelling trouble ahead.
But how bad Ctrip.com (NASDAQ:CTRP) should be punished for lack of revenue growth? According to the financial statement, "For the first quarter of 2010, the Company expects to continue the year-on-year net revenue growth at a rate of approximately 30%". This translates to approx. RMB 520 million to 2010 first quarter revenue, below 2009 fourth quarter RMB 566 million net revenue.
To get the true picture of revenues and earnings dynamics, let's step back and take a look at the company from a distance.
The first thing to notice is the relatively constant revenue and earnings growth for the company. Another good sign is that Ctrip.com (NASDAQ:CTRP) didn't disappoint for the fourth quarter, revenues are up year-over-year (YoY) and quarter-over-quarter (QoQ). Earnings grew YoY but became flat QoQ. So it's really the revenue guidance that hurts.
Based on the chart, first quarter revenues weren't blockbuster quarters from a historical point of view. Considering that business outlook, e.g. revenue guidance, is always subject to change, my reading on current financial report is much better then those investors who sold it last night. Time will tell who was right.
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