Priceline Results Top Estimates, But Issues Weak Q2 Outlook

(RTTNews) - Online travel agency Priceline Group, Inc. (PCLN) reported Thursday a profit for the first quarter that edged up from last year, reflecting strong double-digit revenue growth amid higher travel bookings.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations. However, the company provided earnings and revenue growth guidance for the second quarter, below Street view.

"The Priceline Group is off to a strong start in 2015 with accelerating growth in room nights and rental car days booked," President and CEO Darren Huston said in a statement.

The Norwalk, Connecticut-based company reported net income applicable to common shareholders of $333.33 million or $6.36 per share for the first quarter, up from $331.22 million or $6.25 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter were $428.53 million or $8.12 per share, compared to $416.48 million or $7.81 per share in the year-ago quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $7.72 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter rose 12 percent to $1.84 billion from $1.64 billion in the same quarter last year, and topped twenty Wall Street analysts' consensus estimate of $1.80 billion.

Agency revenues for the quarter grew 15 percent to $1.20 billion, as well as advertising and other revenues doubled to $146.67 million from the year-ago quarter. However, merchant revenues declined 6 percent to $494.68 million from a year ago.

Gross travel bookings for the Priceline Group grew 12 percent from the year-ago quarter to $13.8 billion, and increased 26 percent on a constant currency basis. This refers to the total dollar value of all travel services purchased by its customers, generally inclusive of all taxes and fees.

International gross bookings growth accelerated 13.7 percent or 29% on a constant currency basis, to $12.1 billion.

Globally, the accommodation business booked more than 100 million room nights for the first time during a quarter at 104.6 million, an increase of 25.4 percent from last year.

Booking.com continues to extend its lead as the world's largest brand for booking accommodations, with over 635,000 hotels and other accommodations on the platform, up 40 percent from last year. The rental car business grew rental car days by 18 percent from last year.

Looking ahead to the second quarter, the owner of Priceline.com, Booking.com and Kayak.com said it expects adjusted earnings between $10.95 and $11.75 per share, on projected revenue growth of about 0 to 7 percent.

Analysts expect the company to report earnings of $13.10 per share for the quarter on 8.6 percent increase in revenues to $2.31 billion.

"We will continue to focus relentlessly on execution at all of our brands and earn our customers' loyalty by delivering winning experiences across desktop, tablet and mobile platforms," Huston added.

In Thursday's regular trading session, PCLN is currently trading at $1,187.00, down $77.60 or 6.14% on a volume of 0.52 million shares. In the past 52-week period, the stock has been trading in a range of $990.69 to $1,329.90.