Trip.com Group Ltd (NASDAQ: TCOM) stock falls on travel slowdown

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Trip.com Group Ltd (NASDAQ: TCOM) stock fell 1.4% in the pre-market session of May 29th, 2020 (Source: Google finance) after the company missed the analysts’ estimates for the first quarter of FY 20. At the end of March, 2020, the balance of cash and cash equivalents, restricted cash, short-term investment, held-to-maturity time deposits and financial products was RMB68.2 billion or $9.6 billion.

Trip.com: Flights, Hotels, Train & Travel Deals - Apps on Google Play

Meanwhile, China domestic travel is on the track of consistent recovery after hitting a low in February. During the May Labor Day holiday, the tourist number in China doubled compared to the previous Qingming Festival in April. Recently, the new reservation for domestic hotel and air have rebounded to more than 70% of previous level. However, the international travel, activities are still at a low level due to global spread of COVID-19 though there is some early signs of recovery in certain markets. The outbound travel activities are at a low level since late January due to tight international travel restrictions across countries and jurisdictions. The company had at the end of March, on hand in capital reserve had $9.6 billion. To ensure maximum financial flexibility, the company had further announced a revolving credit facility of up to $1.5 billion in early April. The company has also taken some more measures, like reducing discretional spending and voluntary management pay cuts to ensure the organization are lean and efficient in response to the pandemic.

TCOM in the first quarter of FY 20 has reported the adjusted loss per share of 53 cents, missing the analysts’ estimates for the adjusted loss per share of 51 cents, according to Zacks Investment Research. The company had reported 42 percent fall in the adjusted revenue to $669 million in the first quarter of FY 20, beating the analysts’ estimates for revenue of $582.9 billion.

Moreover, Accommodation reservation revenue for the first quarter of 2020 fell 62% to RMB1.2 billion, from the same period in 2019 and a 61% decrease from the previous quarter. Transportation ticketing revenue for the first quarter of 2020 declined 29% to RMB2.4 billion from the same period in 2019 and a 31% decrease previous quarter. Packaged tour revenue for the first quarter of 2020 fell 50% to RMB523 from the same period in 2019 and a 35% decrease from the previous quarter. Corporate travel revenue for the first quarter of 2020 fell 47% to RMB126 million from the same period in 2019 and a 66% decrease from the previous quarter.

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