Why Priceline Is Sinking After Earnings
Priceline Group reported better-than-expected first-quarter financial results before the markets opened on Wednesday.
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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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
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