Stock of the Day
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Priceline.com (PCLN)
Priceline.com acquires Bookings B.V.
Priceline.com announced that earnings for the rest of the year would be higher than expected due to its recent acquisition of the Dutch based Bookings B.V., a leading internet site for hotel reservations in Europe. Priceline.com bought the European site for about $133 million. Revenue estimates for the second quarter were between $265 million and $270 million, and earnings on shares were expected to be between 36 and 40 cents.
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While Priceline.com announced higher expectations for the rest of the year, the second quarter performed below analysts expectations. Analysts were expecting earnings to be at $274.6 million or 37 cents a share. Priceline.com expects earnings for the year to be between $1.20 and $1.28 per share, analysts have predicted $1.21 per share. For the second quarter, the company predicted gross bookings to be between $566 and $570 million.
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The CEO of Bookings, Stef Norden, said about the acquisition, "This deal will benefit our customers, suppliers and distribution partners, and our employees. We believe that the additional demand from working with priceline.com and Active Hotels will enable us to provide extra business for our suppliers; and distribution partners and customers will benefit from access to additional hotel supply. In the context of a larger European business, there should also be additional opportunities for our staff." Bookings will keep its current who management team, who will supervise Bookings as part of Priceline.com's Europe portfolio. Bookings executives invested part of the profit from the acquisition back into the company.
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The acquisition of Bookings is yet another part of Priceline's quickly growing service for hotel reservations in Europe. Back in September 2004, they purchased Cambridge-based Active Hotels. They also run activereservations.com and priceline.co.uk. Bookings and Active Hotels alone hold exclusive rates with 18,000 properties. The development of this solid campaign in Europe looks promising for Priceline.com's future.
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Profile |
Priceline.com Incorporated has pioneered a unique e-commerce pricing system known as a "demand collection system" that enables consumers to use the Internet to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Using a simple and compelling consumer proposition - Name Your Own Price - priceline.com collects consumer demand, in the form of individual customer offers guaranteed by a credit card, for a particular product or service at a price set by the customer.
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