Priceline.com 2nd-Quarter Profit Up 37% as International Bookings Rise
08/07/2012| 04:42pm US/Eastern
By Nathalie Tadena
Priceline.com Inc.'s (>> Priceline.com Inc) second-quarter earnings increased 37% as the online travel agent's revenue continued to grow, with particular strength from international hotel bookings.
Shares fell 14% to $582.69 after hours as the company issued downbeat guidance for the current quarter. Through the close, the stock has climbed 45% since the start of the year.
The company projected third-quarter earnings of $11.10 to $12.10 a share with revenue growth of 9% to 15%. Analysts polled by Thomson Reuters had forecast per-share profit of $12.76 and revenue growth of 24%.
Priceline on Tuesday also unveiled a new partnership with CTRIP.com International Ltd. (CTRIP), a travel service provider in China.
The company has reported stronger core earnings every quarter for several years amid growth in its hotel-bookings business, especially for international bookings. The company's heavy reliance on the hotel business has helped protect its top line from a recent pullback in air travel, which makes up a smaller share of its revenue.
President and Chief Executive Jeffery H. Boyd said the company posted solid results for the latest quarter, but noted economic uncertainty across Europe, Asia and the U.S. intensified as the quarter progressed.
Priceline.com's results follow mixed reports for online travel as global economic worries threaten to damp international travel demand. Rival Expedia Inc. (>> Expedia, Inc.) reported its second-quarter earnings fell 25% as it logged heavy technology-related expenses, though core profits were better-than-expected amid robust hotel revenue growth. Meanwhile, TripAdvisor Inc.(>> Tripadvisor Inc)--a former Expedia unit--reported its second-quarter earnings slipped 1.9% as its expenses increased and revenue grew less than the Street had expected.
Priceline reported a profit of $352.3 million, or $6.88 a share, up from $256.4 million, or $5.02 a share, a year earlier. Excluding stock-based compensation and other items, per-share earnings rose to $7.85 from $5.49. Revenue jumped 20% to $1.33 billion.
The company's cautious May forecast called for earnings between $7.20 and $7.40 a share on an 18% to 23% increase in revenue.
Gross margin widened to 75.7% from 67.9%.
Gross bookings, the value of all services bought online through Priceline's brands, climbed 27%. International bookings rose 33%, while domestic bookings were up 5.3%.
Hotel-room nights sold jumped 39%, while rental-car days rose 29%. Airline-ticket volume decreased 1.8%.
Write to Nathalie Tadena at firstname.lastname@example.org
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