Priceline Warns About 2Q’10

Priceline.com Inc (PCLN) plunged more than 12% in after-hours trading on Monday, after the co. gave a weak guidance for the current quarter. The Internet travel company forecast adjusted second-quarter earnings in the range of $2.50 and $2.70 a share excluding items, well off the Street’s view of $2.83 per share on revenue of 759.50 million.

“The Iceland volcano caused widespread disruptions in air travel which resulted in a significant increase in hotel room cancellations for our Booking.com business. Civil unrest in Thailand has substantially impacted hotel room reservations in Thailand, which is a key market for Agoda and Booking.com’s Asia business,” said Jeffery H. Boyd, Priceline’s president and CEO, in a statement. “Lastly, sovereign debt concerns in Europe have resulted in a significant decline in the value of the Euro as compared to the U.S. dollar which adversely impacts our financial results as expressed in U.S. dollars.”

For the first quarter the company reported earnings of $53.9 million, or $1.06 per share on $584.4 million, compared with earnings of $25.0 million, or $0.53 cents per share on $462.1 million in revenue in the first quarter of last year. Adjusted earnings came in at $1.70 a share, up from $1.09 year-over-year basis.  Analysts had expected the company to report a profit of $1.66 per share.

Looking forward the travel Web site operator said it was targeting the following for 2nd quarter 2010:

  • Year-over-year [y/y] increase in total gross travel bookings of approximately 32.5% – 37.5%.
  • y/y increase in international gross travel bookings of approximately 45% – 50% (an increase of approximately 55% – 60% on a local currency basis).
  • y/y increase in domestic gross travel bookings of approximately 15% – 20%.
  • y/y increase in revenue of approximately 18% – 23%.
  • y/y increase in gross profit of approximately 34% – 39%.
  • Pro forma EBITDA of approximately $170 million to $180 million.
  • Pro forma net income of between $2.50 and $2.70 per diluted share.

Shares of Priceline.com rose 11.8% on Monday to close the session at $249.75, before reversing the day’s gains and nosediving $30.24 a share, or 12.11%, to $219.51 in after hours trading.  PCLN has ranged from $98 to $273.93 over the past 52 weeks.

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