Why Priceline Is Sinking After Earnings

By Chris Lange Updated Jan 13, 9:54AM EST · Published May 4, 9:05AM EDT

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Why Priceline Is Sinking After Earnings — © Thinkstock

Priceline Group Inc. (NASDAQ: PCLN) reported its first-quarter financial results before the markets opened on Wednesday. The company said it had $10.54 in earnings per share (EPS) on $2.15 billion in revenue. That compares to consensus estimates from Thomson Reuters of $9.66 in EPS on revenue of $2.12 billion. In the same period of last year, the company posted EPS of $8.12 and $1.84 billion in revenue.

In the second quarter the company expects room nights booked to increase by roughly 15% to 22% from the same period last year, as well as total gross travel bookings to increase by 11% to 18%.

It also expects to have EPS in the range of $11.60 to $12.50 and revenue to increase by 7% to 14% in the second quarter. The consensus estimates call for $14.98 in EPS on $2.65 billion in revenue.

As for its business segments Priceline reported:

Agency revenues totaled $1.50 billion.
Merchant revenues totaled $470.0 million.
Advertising and other revenues totaled $178.1 million.

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Jeffery H. Boyd, chairman and interim CEO of Priceline, commented:

The Priceline Group delivered strong top line growth and attractive margins in the first quarter. Growth in room night reservations of 31% reflects continued solid execution in the market for global travel. … The Group is looking forward to continued investments in product, service and branding that will drive long-term growth for our leading brands.

On the books, cash, cash equivalents and short-term investments totaled $3.38 billion at the end of the quarter, compared to $2.65 billion at the end of 2015.

Shares of Priceline closed Tuesday at $1,354.64, with a consensus analyst price target of $1475.04 and a 52-week trading range of $954.02 to $1,476.52. Following the release of the earnings report, the stock was down about 9% at $1,235.00 in early trading indications Wednesday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.