Plus   Neg

Priceline.com Profit More Than Doubles, Gives Cautious Foreast


Online travel company priceline.com Inc. (PCLN), said Monday its first-quarter profit more than doubled from last year, boosted by higher revenues, and strong bookings. Quarterly earnings came in well ahead of the analysts' expectations, as did revenues.

Looking ahead, the company provided earnings outlook for the second quarter, which is estimated come in below the Street consensus. The company noted that its results would be impacted by the Iceland volcano issue, which caused widespread disruptions in air travel, as well as the civil unrest in Thailand, and sovereign debt concerns in Europe. Following the news, the company's shares lost more than 11% in the after-hours trading.

The Norwalk, Connecticut-based company posted GAAP net income of $53.9 million or $1.06 per share for the first quarter, up from $25.0 million or $0.53 per share in the prior year quarter.

Excluding items, pro forma net income grew to $87.2 million or $1.70 per share from $51.3 million or $1.09 per share in the year-ago quarter. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $1.66 per share for the first quarter. Analysts' estimate typically exclude special items.

First quarter revenues increased 26.5% to $584.4 million from $462.1 million in the same quarter last year. Fourteen analysts had a consensus revenue estimate of $597.20 million for the first quarter.

Revenues from international operations climbed 88.2% to $215.8 million over a year ago. On a local currency basis, revenues grew by about 79%.

Gross travel bookings for the quarter, which refers to the total dollar value of all travel services purchased by consumers, were $3.0 billion, an increase of 52.5% over a year ago.

Merchant revenues rose 9% to $368.3 million, agency revenues increased 77% to $213.2 million, but other revenues declined 39.5% to $2.9 million in the first quarter of 2010.

Priceline.com's gross profit for the first quarter soared 53.2% to $319.1 million from $208.3 million in the previous year quarter. Operating income jumped 105.2% to $87.9 million from $42.8 million in the year-ago quarter.

Total operating expenses for the first quarter increased to $231.2 million from $165.5 million in the prior year quarter.

For the second quarter 2010, priceline.com anticipates GAAP net income of $1.87 to $2.07 per share, and pro forma net income of $2.50 to $2.70 per share.

Revenue is estimated to grow in the range of 18% to 23%, and total gross travel bookings are anticipated to increase in the 32.5% - 37.5% range for the second quarter.

The Street currently expects earnings of $2.83 per share on revenue of $759.50 million for the second quarter.

priceline.com noted that ongoing or future air space closures and travel disruptions tied to the volcano eruption in Iceland could adversely affect the company's results for the second quarter of 2010.

The company also reiterated its expectation that gross travel bookings growth rates would decline in the second half of 2010 as it compares to periods of relatively stronger business performance in the 2nd half of 2009.

Among others in the industry, Bellevue, Washington-based Expedia Inc. (EXPE), reported a 24% increase in its first quarter profit, helped by a 13% rise in revenue from improved bookings.

priceline.com closed Monday's regular trading at $249.75, up $24.36 or 10.81%, on a volume of 3.02 million shares. However, in the after-hours, the share lost $29.25 or 11.71%.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Follow RTT