Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Chinese travel agency Ctrip.com (NAS: CTRP) fell 12% today after it reported disappointing revenue in the second quarter.
So what: Revenue fell 8% from the previous quarter to $153 million, about $1.8 million below estimates. Earnings, however, came in at $0.13 per share, $0.04 above estimates.
Now what: This was more a reaction to potential problems than just a response to the numbers from today. Investors are worried that the Chinese economy is slowing down, and when a company like this misses revenue estimates, even by a small margin, investors get concerned. Shares still trade at 17 times earnings, so I wouldn't go out and rush into shares considering the negative momentum of revenue.
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The article Why Ctrip.com's Shares Went on Clearance Today originally appeared on Fool.com.
Fool contributorTravis Hoiumdoes not have a position in any company mentioned. You can follow Travis on Twitter at@FlushDrawFool, check out hispersonal stock holdingsor follow his CAPS picks atTMFFlushDraw.The Motley Fool owns shares of Ctrip.com International.Motley Fool newsletter serviceshave recommended buying shares of Ctrip.com International. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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