Online travel services company Priceline.com Inc. (PCLN: Quote), said Tuesday its profit for the second quarter increased from last year, mostly on growth in international bookings. Earnings for the quarter easily topped Street estimates, while revenues missed expectations as the company grappled with recessionary trends across the globe.
Moving forward, Priceline detailed a weak outlook for the third quarter, citing weak economic conditions in Europe.
Investors were dismayed by the news, sending Priceline.com shares down by more than 15 percent in after-hours trade on the Nasdaq.
CEO Jeffery Boyd said, "The Priceline Group achieved solid results for the 2nd quarter despite economic uncertainty across Europe, Asia and the U.S. that intensified as the quarter progressed..."
Boyd further said, "The Group's international hotel business continues to perform well in the face of difficult macro-economic conditions and the strengthening dollar, which put pressure on top-line growth rates..."
Priceline helps users obtain discount rates for travel-related purchases such as airline tickets and hotel stays. The company operates its business through sites such as Booking.com, priceline.com, Agoda.com, and Rentalcars.com.
During the quarter, Priceline's revenues grew 20.3 percent from last year, helped by international operations that jumped 40.2 percent. Total gross travel bookings for the quarter rose 26.8 percent from last year, with international bookings up 33 percent.
The company registered strong growth in travel reservation services, with room night reservations growing 39 percent from last year. Airline ticket sales fell 1.8 percent, while rental car days grew 29.4 percent.
Norwalk, Connecticut-based Priceline.com reported second quarter net income to common shares of $352 million or $6.88 per share, an increase from $256 million or $5.02 per share last year.
Excluding items, adjusted earnings for the quarter were $404.6 million or $7.85 per share, compared to $282.6 million or $5.49 per share a year ago.
On average, 20 analysts polled by Thomson Reuters expected earnings of $7.37 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter was $1.33 billion, compared to $1.1 billion last year. Nineteen analysts had a consensus revenue estimate of $1.35 billion.
Priceline.com expects third quarter earnings of $10.21 to $11.21 per share and adjusted earnings of $11.10 to $12.10 per share. Revenues are expected to grow 9 to 15 percent from last year.
Analysts currently expect earnings of $12.82 per share and revenues of $1.80 billion for the third quarter.
The company expects third quarter total gross travel bookings to grow 10 to 18 percent year-over-year.
PCLN closed Tuesday at $679.80, up 2.21%, on a volume of 1.2 million shares on the Nasdaq. In after hours, the stock dropped $103.80 or 15.27%. In the past year, the stock has traded in a range of $411.26 - $774.96.
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by RTT Staff Writer
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