Well, apparently Americans are still going on vacation.

Priceline (PCLN) 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, crushing the Street at $1.75. Gross travel bookings in the quarter were $2.38 billion, up 12.8 percent from a year ago. Pro forma EBITDA was $126.2 million, up 24.6 percent year over year.

In a statement, the company said that despite the recession, “leisure travel demand for the summer peak season has been stronger than expected, driven in part by the availability of compelling discounts.”

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Priceline (PCLN) this morning posted better-than-expected Q1 results, and provided stronger-than-expected guidance for the second quarter.

For Q1, the online travel agency posted revenue of $462.1 million and non-GAAP EPS of $1.09 a share; the Street had been expecting $440.8 million and 91 cents. Revenues were up 14.6 percent year over year. Bookings were $1.9 billion, up 10.5 percent versus a year ago.

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Priceline (PCLN) shares are under pressure this morning after Susquehanna Investment Group analyst Marianne Wolk this morning 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. She says the stock is now less compelling “given the macro challenges facing it and the rest of the [online travel agency] industry.”

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Orbitz (OWW) shares are coming under pressure this morning after Goldman Sachs analyst Jennifer Watson cut her rating on the stock to Sell from Neutral. She slashed her price target on the online travel services company to $2.70, from $6.80. “Orbitz has grown gross bookings more slowly than both Expedia and Priceline, and we do not anticipate a reversal in a more challenging economic environment,” she writes. Watson also notes that leverage is high, with net debt 4x EBITDA, reducing flexibility. She points out that 50 percent of excess cash flow must be used to repay debt.

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The online travel booking business is not going to survive an economic downturn unscathed. That’s not a surprising statement, but confirmation of those sentiments yesterday from Expedia (EXPE) has the Street scurrying to revalue the online travel stocks.

As I noted in a post yesterday, Expedia observed on its post-earnings conference call that the softness the company had been seeing in the U.S. and the U.K. earlier in the year has now extended to “nearly all” geographies and all key product areas, including air, hotels and car rentals. The company indicated that transactions dropped off during the week Lehman went bankrupt, and have not rebounded much since.

This morning, several analysts cut ratings on the stock.

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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).

• Orbitz: Target to $5, from $8. EPS estimate for 2008 to loss of 17 cents from loss of 15 cents; 2009 to loss of seven cents from positive 19 cents.
• Expedia: Target to $19, from $30; 2008 to $1.38 from $1.40; 2009 to $1.42, from $1.59.
• Priceline: Target to $90, from $154; 2008 to $5.43, from $5.75; 2009 to $5.80, from $7.15.

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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.

For Q3, the company sees gross travel bookings dropping to 44 to 54 percent, with international growing 58 to 68 percent. Priceline sees revenue in the quarter growing 30 to 35 percent year-over-year, which implies $541.96 million to $562.8 million, compared to Street estimates of $550.8 million. The company sees pro forma profits of $2 to $2.15 a share, versus the Street consensus of $2.05.

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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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