Priceline Is Still Running Faster Than You
May 10th 2012 10:13AM
Updated May 10th 2012 10:14AM
It's easy for priceline.com (NAS: PCLN) to take off. All it has to do is keep reporting healthy financials.
The travel portal came through with another blowout quarter last night. Revenue climbed 28% to $1.04 billion in its latest quarter, and adjusted earnings improved 61% to $221 million -- or $4.28 a share. Analysts nailed the top line, but were once again woefully short on gauging Priceline's earnings power. Wall Street was only holding out for net income of $3.95 a share, but what else is new? The dot-com speedster has blasted past analyst bottom-line estimates for 24 consecutive quarters.
Then again, good things tend to happen when you can boost your gross travel bookings 44%.
Priceline has established itself as the dot-com darling when it comes to online travel. Ctrip.com -- China's top travel website -- doesn't report until next week, but analysts see profitability actually declining on a 23% uptick in revenue.
The comparisons only get easier closer to home.
Expedia (NAS: EXPE) saw its revenue climb 12% on a 15% increase in bookings during the same quarter. Orbitz Worldwide (NYS: OWW) posted a loss during the same three months. Net revenue climbed 3% on a pedestrian 6% advance in bookings.
The results may not seem like much, but both Expedia and Orbitz rallied on the results as the market was bracing for less.
We can extend the universe beyond traditional booking portals. Travel deals publisher Travelzoo (NAS: TZOO) , which just a couple of years ago was growing fasting than Priceline, managed to grow its top line by just 6% in its latest quarter.
MakeMyTrip (NAS: MMYT) is the only portal that may give Priceline a good footrace, and we'll know for sure when India's top travel website reports later this month. Revenue -- after service costs -- climbed 37% higher during the previous quarter.
The only reason that Priceline's stock isn't bouncing up to fresh highs today is that the company's guidance points to decelerating growth. The "name your own price" negotiator is looking to earn between $7.20 a share and $7.40 a share during the current quarter on 18% to 23% revenue growth. Analysts were perched at $7.38 a share in earnings on a 26% top-line spurt.
It's OK, Priceline. You're still the teacher's pet of the online travel class.
Pack a passport
A whopping 62% of Priceline's revenues -- and 81% of its gross bookings -- are being generated internationally.
However, Priceline isn't one of the three American companies set to dominate the world revealed in a recent research report. Find out what the three companies are in the free report. It won't be around forever, so check it out now.
At the time this article was published The Motley Fool owns shares of Ctrip.com International. Motley Fool newsletter services have recommended buying shares of Ctrip.com International, priceline.com, and Travelzoo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Travelzoo. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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