I placed the CTRP earnings trade. The earnings report after the market closes today. As with all earnings trades, you cannot do anything after placing the trade, you manage it after the event.
The story here, as best as I can make out is that the earnings expectation is a loss, but with significant potential going forward, with a done deal in the pipe.
With that scenario, the stock could move, but without any jumps of 20%+.
China’s top online travel agency Ctrip.com (CTRP) is poised late Wednesday to report fiscal Q1 sales that nearly doubled vs. last year following its merger with Qunar Cayman Islands (QUNR), but Wall Street also expects losses for the first time in four quarters.
For fiscal Q1 ended on or near March 31, Ctrip is expected to report 4.14 billion yuan in sales and a 3.62 yuan loss per American Depository Share ex items. Based on Tuesday’s exchange rate (1 yuan to 15 U.S. cents), that would be $627 million and a 55-cent loss.
Sales would rise 79% year over year, but the bottom line would swing from a profit of 0.23 yuan (4 cents) per ADS in the year-earlier quarter. Three months ago, Ctrip guided to 75%-80% growth in fiscal Q1, following its merger with Qunar.
In October, Ctrip and Qunar agreed to combine products and services. Chinese internet leader Baidu (BIDU) owns 25% of Qunar stock, and Ctrip has a 45% voting interest in Qunar. Qunar initially rejected a buyout offer from Ctrip in early 2015.
Ctrip stock finished 1.5% higher at 40.11 on the stock market today, while Qunar stock fell 1.1% to 28.84. Baidu lost 1.7%, while shares of U.S.-based online travel leaders Priceline (PCLN) and Expedia(EXPE) fell 0.9% and rose 0.6%, respectively.
|About Ctrip.Com International Ltd (NasdaqGS:CTRP)|
|Ctrip.com International, Ltd., together with its subsidiaries, provides travel service for accommodation reservation, transportation ticketing, packaged tours, and corporate travel management in the People’s Republic of China. The company operates as an agent for hotel-related transactions; sells air tickets; and other related services, including sale of aviation and train insurance, air-ticket delivery services, online check-in, and other value-added services, such as online seat selection and flight dynamics. It also provides independent leisure travelers bundled packaged-tour products comprising group tours, semi-group tours, and private tours or packaged tours with various transportation arrangements, such as cruise, bus, and self-driving. In addition, the company offers integrated transportation and accommodation services; various value-added services, such as transportation at destinations and tickets, insurance, visa services, and tour guides; supplier management and customer relationship management services; and car rental services. Further, it provides travel data collection and analysis, industry benchmark, cost saving analysis, and travel management solutions; Corporate Travel Management System, an online platform that integrates information maintenance, online booking and authorization, online enquiry, and travel report system. Additionally, the company offers online advertising services; and sells Property Management System, as well as provides related maintenance services. Ctrip.com International, Ltd. was founded in 1999 and is headquartered in Shanghai, the People’s Republic of China.|