Priceline profit tops estimates as bookings rise
(Reuters) - Priceline.com, the online travel agency known for its name-your-own-price auctions, posted a higher-than-expected quarterly profit on Thursday, boosting shares in extended trading.
Darren Huston, the former chief of Booking.com who became chief executive officer and president of Priceline.com in January, said bookings for hotel stays, airline tickets and rental cars picked up at the end of the quarter for the start of 2014. He added that advertising for Booking.com was paying off in the United States.
"There was broad-based strength throughout the world but the U.S. in particular was a very healthy market," Huston said in an interview.
He said the Priceline brand performed well, aided by airline ticket sales and rental car reservations.
Priceline, which owns Kayak.com and Agoda.com, is boosting its presence in fast-growing markets such as Asia. The acquisition of Kayak, which compiles airline and hotel prices from other travel websites, gave Priceline more exposure.
"Priceline continues to take market share or just gain penetration across all of its geographies," said Daniel Kurnos, an analyst with Benchmark Company.
Fourth-quarter net income came to $378 million, or $7.14 a diluted share, compared with $289 million, or $5.63 a share, a year earlier.
Adjusted for items, profit came to $8.85 a share, compared with $8.29 a share expected by analysts on average, according to Thomson Reuters I/B/E/S.
Gross bookings, or the total dollar value of travel services purchases, came to $9.1 billion, up about 39 percent from the year earlier. International bookings rose 41 percent while U.S. bookings gained nearly 27 percent.
Quarterly revenue rose about 29 percent to $1.54 billion.
The results from Priceline followed stronger-than-expected results from rivals Expedia Inc and Orbitz Worldwide Inc in recent weeks.
"Online travel within travel is very strong, and within online travel, people are turning to online travel agencies even more," Huston said. "It's a combination of those things that I think have led to a pretty healthy environment for all the players in this space."
Priceline forecast profit of $6.35 to $6.85 a share for the first quarter. Analysts expected $7.19.
Company officials said in a conference call that the fact that the Easter holiday falls in April this year, compared to March last year, could put pressure on margins. That could mean some bookings for Easter week, a popular vacation time, would not apply to revenue for the first quarter that ends March 31.
Shares of Priceline were up about 1.4 percent to $1,300.99 in extended trading after the results were posted Thursday. They have risen 10 percent this year, compared with 14 percent for Expedia and 27 percent for Orbitz.