* Q2 adjusted EPS $7.85 vs estimate $7.36
* Q3 forecast shy of analysts' estimate
* Europe uncertainty weighs
By Karen Jacobs
Aug 7 Priceline.com, the online travel
agency, topped quarterly profit estimates on Tuesday, but its
shares slumped about 15 percent in extended trading as it said
weakening conditions in Europe could hurt growth in the current
Priceline.com, which competes with Expedia Inc and
Orbitz Worldwide Inc, owes much of its success to
international bookings on its popular European travel site
But the weakness of the euro against the U.S. dollar has
hurt the value of international bookings. The company said more
deterioration could come in Europe, which represents 60 percent
of its total booked room nights.
"We're assuming fairly significant deceleration in growth
rates from here on out, over concern about macroeconomic
conditions and our worry that conditions will worsen,
particularly in Europe which is such a key market for us," Chief
Financial Officer Daniel Finnegan said on a call with analysts.
The company, known for its name-your-own-price auction, said
it expects profit excluding the impact of items of $11.10 to
$12.10 a share for the current quarter. That compares with
$12.76 expected by analysts, according to Thomson Reuters
Dan Su, a Morningstar analyst, said bookings growth looked
to be light for the third quarter. Priceline.com said
third-quarter gross travel bookings should increase about 10
percent to 18 percent, compared with the second quarter's
increase of nearly 27 percent.
"Their guidance implies pretty heavy currency headwind," Su
She added that increases in international and domestic
bookings for the second quarter, of 33.1 percent and 5.3 percent
respectively, were at the lower end of forecasts the company had
given in May.
"That just shows they are having a more difficult time
trying to grow their travel bookings," Su said.
Second quarter net income was $352.3 million, or $6.88 a
share, compared with $256.4 million, or $5.02 a share, a year
Adjusted for items, profit was $7.85 a share in the second
quarter, compared with $7.36 expected by analysts.
Quarterly revenue rose 20 percent to $1.3 billion.
The company's shares fell to about $580 in trade after the
bell from their Nasdaq close of $679.80 on Tuesday.