Priceline Group Q3 Profit Rises, Beats View; But Outlook Disappoints

(RTTNews) - Online travel agency Priceline Group Inc. (PCLN) on Tuesday reported a 27 percent increase in profit for the third quarter from last year, reflecting strong revenue growth and lower costs.

Adjusted earnings per share for the quarter beat analysts' expectations. However, the company forecast results for the fourth quarter below Street estimates.

The company's net income applicable to common shareholders for the third quarter rose to $1.06 billion or $20.03 per share from $832.99 million or $15.72 per share in the same period a year ago.

Adjusted earnings for the quarter were $22.16 per share, compared to $17.30 per share in the year-ago period. On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $21.11 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter rose 25 percent to $2.84 billion from $2.27 billion in the previous year. Analysts expected revenues of $2.83 billion for the quarter.

Agency revenues for the quarter grew 33 percent from the year-ago period to $2.10 billion, while advertising and other revenues jumped 70 percent to $123.33 million. However, Merchant revenues declined 1 percent to $613.54 million.

Gross travel bookings for the Priceline Group climbed 28 percent from the year-ago period to $13.8 billion. This refers to the total dollar value of all travel services purchased by its customers, generally inclusive of all taxes and fees.

Globally, the accommodation business booked 95 million room nights, an increase of 27 percent from last year. Booking.com's booking accommodations grew 52 percent over last year, while the company's car rental business grew rental car days by 18 percent over the year-ago period.

Looking ahead to the fourth quarter, the owner of Priceline.com, Booking.com and Kayak.com forecast adjusted net income per share between $9.40 and $10.10, and an increase in revenue of about 11 to 18 percent.

Analysts expect the company to report earnings of $10.91 per share for the quarter on 23.8 percent increase in revenues to $1.91 billion.

Darren Huston, President and CEO of Priceline Group said, "Our brands are performing well in a very competitive marketplace and against a mixed macro-economic backdrop, particularly in Europe. We intend to continue to make the smart investments for future growth, including broadening our offerings, building our brands and providing a superior experience to our customers, pre- and post-reservation, across all devices."

PCLN is trading at $1,101.37, down $97.15 or 8.11 percent on a volume of 1.62 million shares.