Priceline.com Earnings: Double Digit Revenue Growth, Stock Fades

S&P 500 (NYSE:SPY) component priceline.com Incorporated (NASDAQ:PCLN) reported net income above Wall Street’s expectations for the first quarter. Priceline.com is an online travel company that offers travel services, including hotel rooms, airline tickets, vacation packages, car rentals, cruises, and destination services.

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priceline.com Incorporated Earnings Cheat Sheet for the First Quarter

Results: Net income for priceline.com Incorporated rose to $182 million ($3.54 per share) vs. $104.8 million ($2.05 per share) in the same quarter a year earlier. This marks a rise of 73.7% from the year-earlier quarter.

Revenue: Rose 28.2% to $1.04 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: priceline.com Incorporated reported adjusted net income of $4.28 per share. By that measure, the company beat the mean estimate of $3.63 per share. Analysts were expecting revenue of $1.04 billion.

Quoting Management: “The Priceline Group’s hotel business booked 46 million room nights in the 1st quarter, up 47% over last year,” said Jeffery H. Boyd, President and Chief Executive Officer. “International gross bookings increased 54% (58% on a local currency basis), driven by strong hotel results at Booking.com and Agoda.com and continued growth at Rentalcars.com.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 38.2%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 45% from the year earlier quarter.

Last quarter, the company’s gross margin expanded 9.2 percentage points from the year-earlier quarter to 71.7%. It was the fifth consecutive quarter of gross-margin growth. In this period, margins have grown an average of 8.8 percentage points per quarter on a year-over-year basis.

The company has now seen its net income increase for three consecutive quarters. In the fourth quarter of the last fiscal year, net income rose 66.3% and in the third quarter of the last fiscal year, the figure rose more than twofold.

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 12 cents in the fourth quarter of the last fiscal year, by 73 cents in the third quarter of the last fiscal year, and by 69 cents in the second quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from $7.17 a share to $7.10 over the last sixty days. For the fiscal year, the average estimate has moved up from $29.11 a share to $30.03 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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