Priceline profit rises on leisure travel demand

CHICAGO (Reuters) - Online travel agency Priceline.com Inc (PCLN.O) said quarterly profit rose 35 percent, topping expectations and matching rivals' similar strong results amid an apparent rebound in demand for leisure travel.

The company attributed its profit and those of Expedia Inc (EXPE.O) and Orbitz Worldwide (OWW.N) to travel bargains offered by hotels and airlines to blunt the impact of the recession.

Priceline shares rallied 13.4 percent to $148.92 in Monday morning trade on Nasdaq.

"Online travel agencies are definitely benefiting from the relaxed travel pricing that has lured vacationers over the last several months," said Morningstar analyst Warren Miller.

"As consumer confidence returns, we expect to see a quick but dramatic uptick in growth for online travel agencies as consumers lengthen their booking window and some incremental demand returns," Miller said.

The travel business has been suffering as the recession erodes demand, particularly for business travel. Online travel agencies have been trying to stimulate bookings with incentives and fee waivers.

Priceline said second-quarter net profit was $67 million, or $1.38 per share, compared with $49.8 million, or $1.00 per share, a year earlier.

Excluding one-time items, Priceline earned $2.02 per share, easily topping an average Wall Street forecast of $1.79, according to Reuters Estimates.

Priceline, best known for its name-your-own-price auctions, said the total value of its bookings rose 12.8 percent to $2.38 billion. Priceline's revenue jumped 17.5 percent to $603.7 million.

"Despite a difficult economic climate, leisure travel demand for the summer peak season has been stronger than expected, driven in part by the availability of compelling discounts," said Priceline Chief Executive Jeffery Boyd.

Priceline said it expects the value of its travel bookings to increase in the third quarter by 20 percent to 26 percent.

(Reporting by Kyle Peterson, editing by Gerald E. McCormick and John Wallace)