Priceline misses earnings estimates and falls in trading

Source: Bloomberg

May 10 (Bloomberg) — Priceline.com Inc., the biggest U.S. online travel agency by market value, fell in late trading yesterday after forecasting second-quarter earnings that trailed analysts’ estimates.

Profit, excluding some items, will be $7.20 to $7.40 a share in the second quarter, the Norwalk, Connecticut-based company said yesterday in a statement. That missed the average $7.43 estimate compiled by Bloomberg.

Priceline gets about 60 percent of its revenue from overseas, mostly in Europe, which is suffering from a deepening debt crisis. While bookings in Priceline’s international business are still expected to increase as much as 37 percent in the current quarter from the prior year, that’s a slowdown from 54 percent in the first quarter. Smaller rivals Expedia Inc. and Orbitz Worldwide Inc., meanwhile, are coming off better-than- expected results.

Priceline fell as much as 8.2 percent to $660 in extended trading yesterday after closing at $718.95 in New York. The stock had climbed 54 percent this year before today, and is up almost ten-fold since the end of 2008.

Net income in the first quarter increased 74 percent to $182 million, or $3.54 a share, as revenue rose 28 percent to $1.04 billion. Excluding some items, profit of $4.28 a share topped the $3.95 average analyst estimate.

The company has grown faster in recent years than Expedia and Orbitz because of acquisitions made in Europe and Asia. Priceline bought Amsterdam-based Booking.com in 2005 and Bangkok-based Agoda.com in 2007.

International sales increased 59 percent to $617 million in the first quarter, Priceline said.

Recessions, Upheaval

In addition to recessions in some European countries, political upheaval in Greece is creating added uncertainty around the business, Chief Executive Officer Jeffery Boyd said yesterdat on the quarterly conference call.

Expedia, based in Bellevue, Washington, is trying to catch up. The company said on April 26 that its Hotels.com business helped drive a 12 percent jump in revenue to $816.5 million. Expedia shares have surged 42 percent this year.

TripAdvisor Inc., the recommendation service spun off from Expedia in December, said last week that first-quarter sales rose 23 percent to $183.7 million.

–Editors: Lisa Rapaport, Cecile Daurat

To contact the reporter on this story: Ari Levy in San Francisco at [email protected]

To contact the editor responsible for this story: Tom Giles at [email protected]