The travel industry received a large boost in the market due to major companies reporting strong financial results for the latest quarter. Priceline.com (NASDAQ:PCLN), the most valuable online-travel agency, reported that net income surged 27 percent to $597 million ($11.66 per share), compared to $469 million ($9.17 per share) last year. Adjusting for items, earnings came in at $12.40 per share, easily topping estimates of $11.81 per share by Wall Street.
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Revenues also climbed higher as international bookings on its European travel site Booking.com was stronger than estimated. Total revenues in the third quarter jumped 17.4 percent to $1.7 billion, compared to $1.45 billion last year. International operations contributed $1.2 billion in revenue, a 30.6 percent increase. The company noted that its expectation for slowing growth in Europe “proved conservative.” Priceline acquired Booking.com in 2005 to help expand its presence in Europe.
“The Priceline Group delivered solid growth and operating results in the third quarter as growth in the second half of the quarter in our key European market exceeded our forecast. Globally our hotel business grew room nights by 36 percent over the same period last year, compared to 39 percent growth in the second quarter. Our rental car business grew rental car days by 35 percent over last year, an acceleration from 29 percent in the second quarter, led by improving results at priceline.com and continued strong growth from rentalcars.com,” said Jeffery H. Boyd, president and chief executive officer.
In addition to the impressive Priceline results, TripAdvisor (NASDAQ:TRIP) also reported earnings for the third quarter. Net income increased 9 percent from last year to $59.4 million (41 cents per share). Adjusted net income came in at 46 cents per share, beating analysts’ estimates by 4 cents.
“As we drive continued traffic and content growth on a global scale, we are making wonderful strides to enhance the TripAdvisor experience for both our traveler community and our advertising partners alike,” Steve Kaufer, chief executive officer, said in a statement. “These efforts, and TripAdvisor’s record third quarter financial performance, put us squarely on track to meet our 2012 objectives.”
As the chart above shows, the upbeat financial results provided a lift for the travel industry. Shares of Priceline jumped more than 10 percent during Friday trading, and eventually closed the day 8.3 percent higher. TripAdvisor shares surged 19 percent on heavy volume to close above $35 a share. It was the company’s best single-day performance since being spun out by Expedia (NASDAQ:EXPE) in late 2011. Competitor Orbitz Worldwide (NYSE:OWW) finished the day nearly 3 percent in the green.
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