Priceline.com Third Quarter Earnings

By Investopedia Staff | November 01, 2012 AAA

Priceline.com Incorporated (Nasdaq:PCLN) announced its results for the third quarter on November 1, 2012. Priceline.com is an online travel company that offers travel services, including hotel rooms, airline tickets, vacation packages, car rentals, cruises, and destination services.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: 5 Tricks Companies Use During Earnings Season

The Numbers: Priceline.com's latest numbers were good, as the company announced EPS and revenues that came in ahead predictions. The company reported $11.66 per share versus the $11.47 per share estimate and revenues of $1.7 billion versus the $1.04 billion estimate. EPS rose 27.2% while revenue climbed 17% from the same period last year. Priceline.com has averaged revenue growth of 29.2% over the past five quarters. The company's net income for the quarter was $596.6 million. This is 27.1% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.

Management Quote: "The Priceline Group delivered solid growth and operating results in the three rd quarter as growth in the second half of the quarter in our key European market exceeded our forecast. Globally our hotel business grew room nights by 36% over the same period last year, compared to 39% growth in the second quarter. Our rental car business grew rental car days by 35% over last year, an acceleration from 29% in the second quarter, led by improving results at priceline.com and continued strong growth from rentalcars.com," said Jeffery H. Boyd, President and Chief Executive Officer of The Priceline Group.

A Look Back: Net income has increased 63% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed more than twofold from the year-earlier quarter.

Looking Ahead: Analysts appear increasingly negative about the company's results for the next quarter. The average estimate for the fourth quarter has moved down from $6.52 a share to $5.96 over the last 90 days. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. At $28.85 per share, the average estimate for the fiscal year has fallen from $29.81 90 days ago.

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