Priceline (PCLN) Beats Forecasts, Issues Weak Outlook

Shares of the Priceline Group Inc (PCLN) were trading down -64.90 or -4.48 percent to $1,385.00 per share in Monday’s premarket after the company announced better than expected results for its fiscal third quarter but issued a lower than expected outlook for the fourth quarter and full year. Priceline Group Inc. stock closed at $1,449.90 per share, down -12.74 or -0.87 percent in Friday’s regular trading session.

Norwalk, Connecticut based Priceline Group Inc., formerly known as LLC was founded in 1997 and is the largest travel agent in the United States.
The company provides online travel and other related services such as hotel bookings and car rentals through its six primary brands:,, KAYAK, OpenTable, and The Priceline Group Inc. has operations in over 200 countries worldwide, including Africa, the Asia-Pacific region, Europe, the Middle East and North and South America. The company named Darren Huston as Chief Executive Officer last year, succeeding its former CEO, Jeffery H. Boyd who continues as Chairman of the Board.

For the company’s third quarter, Priceline had net income of $23.41 per share, adjusted for amortization and stock option costs, earnings per share came to $1.3 billion or $25.35 versus $22.16 per share in the same period one year ago, an increase of +10 percent. The company reported revenue of $3.1 billion, an increase of +9.4 percent over last year; analysts were expecting the company to report earnings of $24.21 per share on $3.05 billion in revenue.

Gross travel bookings for the quarter — total dollar value including taxes and fees for all travel services purchased — came to $14.8 billion, an increase of seven percent over the same period one year ago and a +22 percent increase on a constant currency basis. Gross profit increased to $2.9 billion, up +12 percent year on year, while adjusted EBIDTA increased +12 percent to $1.6 billion.

Darren Huston, President and Chief Executive Officer of The Priceline Group noted in the company’s press release that, “The Priceline Group delivered strong growth and operating results during its high travel season. Globally, our accommodation business booked a record 116 million room nights in the 3rd quarter, up 22% over the same period last year. Gross profit grew 29% on a constant currency basis. showed continued positive momentum with over 820,000 properties on its platform, up 38% over last year. This represents over 21 million potentially bookable rooms, the largest, and most diverse, selection of directly bookable accommodations in the world.”

He concluded saying, “The Group's mission is to help people experience the world. We continue to be the most valuable platform in the world exclusively dedicated to this pursuit. We will continue to focus on making the right investments across our six brands - in people, systems, and demand - to continue to profitably grow our business.”

Priceline’s guidance for the fourth quarter was what put pressure on the share price this morning: the company expects year over year increase in total gross travel booking of approximately +1 to +8 percent or +13 percent to +20 percent on a constant currency basis, with an increase in gross profit of +3 to +10 percent or +17 to 24 percent in constant currencies. Non-GAAP income per diluted share is projected to be $11.10 to $11. 90. Analysts were expecting fourth quarter guidance for adjusted earnings of $12.53 per share.

Despite this morning’s selloff, Priceline stock is still up over 20 percent this year. The stock has recovered considerably this morning since being down more than seven percent right after the earnings release.

Other News About PCLN

Priceline Won’t Bid on HomeAway, says MarketWatch

Priceline said it had “no current plans” to fight Expedia for HomeAway.

How High Can Priceline Fly?

Company is still making money despite the strong U.S. Dollar.

Other Stocks in the News

DuPont appoints Edward Breen permanent CEO

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Apache jumps 10% premarket on report of possible takeover

Potential buyer has not yet been identified.

Published on Nov 9, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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