August 3, 2010 / 8:47 PM / 9 years ago

CORRECTED - UPDATE 2-Priceline profit up as bookings climb; shares leap

(Corrects paragraph 9 to “rose 59 percent compared with a year ago” instead of “rose 63.6 percent to $321.8 million”)

* Net profit $2.26 vs $1.38 yr-ago

* Excluding items EPS $3.09 vs Street view $2.65

* Gross bookings up 43 pct

* Shares up more than 17 pct (Recasts to add downturn, paragraph 1; adds details, outlook, CEO comment, analyst comment; updates shares)

By Kyle Peterson

CHICAGO, Aug 3 (Reuters) - Online travel agency Priceline PCLN.O on Tuesday posted quarterly profit above analyst forecasts as bookings jumped 43 percent, led by international bookings and hotel reservations as the industry recovers from a downturn.

The earnings beat and the outlook for continued bookings growth sent Priceline shares up more than 17 percent.

“The stronger international growth, combined with better expense management, led to the strong upside,” said Aaron Kessler, an analyst at Thinkequity.

“The guidance looks pretty strong as well,” he said.

Priceline, which is best known for its name-your-own-price auction, said its second-quarter net profit was $115 million, or $2.26 per share — up from $67 million, or $1.38 per share, a year earlier, when the travel industry was in the grip of an economic downturn.

Excluding one-time items, Priceline’s profit was $3.09 per share — above analysts’ average estimate of $2.65, according to Thomson Reuters I/B/E/S.

Online travel companies responded to the economic downturn by slashing fees and offering promotions to bolster bookings.

Priceline, which is best known for its name-your-own-price auction, said the total value of its bookings rose 43 percent to $3.4 billion.

International bookings rose 59 percent compared with a year ago. The company said global hotel reservations increased by 48 percent.

Priceline said it expects the total value of its travel bookings to rise 33 percent to 38 percent in the third quarter. The company predicts adjusted income of $4.78 to $4.98 per share.

“The quarter and the guidance going forward reflects improved economic conditions,” Priceline Chief Executive Jeffery Boyd told Reuters.

He noted strong growth in hotel room bookings as the industry recovers from the recession.

“My guess is that occupancy and average daily rates still haven’t reached the highs that they achieved in 2008 before the downturn,” Boyd said.

Last week, Priceline’s largest publicly traded rival, Expedia Inc (EXPE.O), said its net income rose amid stronger bookings. The other publicly traded online travel agency Orbitz Worldwide OWW.N is set to report earnings on Thursday.

Priceline shares rose $39.96, or 17.3 percent, after closing at $230.67 on Nasdaq. (Reporting by Kyle Peterson; Editing by Gary Hill)

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