Tripadvisor swings to a £12.92 million net loss in Q1 due to COVID-19 restrictions

Tripadvisor Inc. (NASDAQ: TRIP) released its quarterly financial results on Thursday that showed the company to have swung to a loss in the first quarter as the Coronavirus brought the global travel and tourism industry to a near halt.

In a bid to shore up finances and cushion the economic blow from COVID-19, Tripadvisor also furloughed 22% of its workers or 850 employees on Thursday.

Tripadvisor dropped around 5% in after-hours trading on Thursday.

As per the travel site, the announced furlough will primarily affect the sales division at its subsidiary, TheFork. According to CEO Steve Kaufer of Tripadvisor, the company plans on inviting the furloughed employees back to work later in 2020 when the global travel industry starts to recover.

Tripadvisor’s Q1 financial results versus analysts’ estimates

The CEO also added on Thursday that the company saw an over 90% decline in its daily bookings and revenue from multiple segments in late March. A similar trend, Kaufer said, continued in April as well.

According to FactSet, analysts were expecting the company to print £239.61 million in revenue in the first quarter. Experts had also anticipated a 2.42 pence of loss per share or a 13.7 pence of adjusted profit per share for Tripadvisor in the recent quarter. In its report on Thursday, the online travel company fell short on the revenue front posting a lower £224.51 million in Q1 that marked a 26% decline as compared to the same quarter last year.

Tripadvisor’s net loss came in at £12.92 million in the first quarter that translated to 9.7 pence per share. Adjusted earnings in Q1 posted at 5.6 pence per share. In the comparable quarter last year, the company had recorded £21 million (14.5 pence per share) in profit.

The U.S company attributed its downbeat performance to a 33% year over year decline in the revenue from its hotels, media, and platform business.

Tripadvisor receives financial support under the CARES act

Tripadvisor accepted an £11.31 million income tax benefit under the U.S government’s CARES act in the first quarter. According to CFO Ernst Teunissen:

“We believe we have the liquidity and the revised financial covenants to withstand an extended period of business disruption.”

Tripadvisor is currently around 40% down year to date in the stock market. Its performance in 2019 was not any encouraging either with an annual loss of roughly 45%. The travel company is currently valued at £2.03 billion and has a price to earnings ratio of 20.95.