Well, apparently Americans are still going on vacation.
Priceline this morning posted Q2 revenue of $603.7 million, well ahead of the Street consensus of $575.1 million, with pro forma profits of $2.02 a share.
Priceline this morning posted better-than-expected Q1 results, and provided stronger-than-expected guidance for the second quarter.
Priceline shares are under pressure this morning after Susquehanna Investment Group analyst Marianne Wolk cut her rating on the stock to Neutral from Positive. She says the shares have rallied significantly “and now discount more of the positive in the story,” including a resilient Name Your Own Price business, a highly variable cost structure, a declining share count and a more favorable currency environment.
Goldman Sachs analyst Jennifer Watson slashed her price target on Orbitz from $6.80 to $2.70 this morning, based on its slow growth in comparison to Expedia and Priceline, and its heavy reliance on consumer fees. Accordingly, the stock has taken a tumble.
In a post-earnings conference call yesterday, Expedia remarked that the soft market they’d been seeing in the U.S. and U.K. ever since Lehman went bankrupt has now extended to “nearly all” geographies and products–including air, hotels and car rentals. Priceline and Orbitz share the same problem–Orbitz to the greatest extent, since its business is primarily focused on air. Travel well.
If the economy is going to slow (which it is) and the jobless rate is going rise (which it is) you can safely conclude that people will be traveling less. That’s the core idea behind the call on the online travel sites by Bank of America’s Brian Pitz and Brian Fitzgerald, who today chopped their estimates and price targets on Orbitz (OWW), Expedia (EXPE) and Priceline (PCLN).
Priceline (PCLN) shares are down sharply in late trading, despite a strong Q2 financial report.
For the quarter, Priceline posted revenue of $514 million and non-GAAP profits of $1.55 a share, nicely ahead of the Street at $495.7 million and $1.41. Gross travel bookings grew 71 percent, with 80.1 percent growth internationally, and 59.2 percent growth domestically.
Just in time for the busiest travel days of the year, Stifel Nicolaus analyst George Askew today turned cautious on the online travel sector. He cut his ratings on Priceline, Expedia and Orbitz to hold from buy.
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