Reporting its financial results for the first quarter of 2006, Priceline.com Incorporated shared that its net operating

Reporting its financial results for the first quarter of 2006, Priceline.com Incorporated shared that its net operating profit was $7.6 million, or 19 cents per share, compared with a profit of $8.4 million, or 21 cents per share, year earlier.

Published: 03 May 2006

Reporting its financial results for the first quarter of 2006, Priceline.com Incorporated shared that its net operating profit was $7.6 million, or 19 cents per share, compared with a profit of $8.4 million, or 21 cents per share, year earlier.

The operating profit fell nearly 10 percent in the first quarter as spending increased for advertising the company’s hotel business. Revenues in the first quarter were $241.9 million, a 3.7 percent increase over a year ago. 2006 results include the operating results of Bookings B.V., which was acquired in July 2005.

Priceline.com saw accelerating bookings growth in the U.S. and in Europe in the first quarter of 2006. Gross travel bookings for the quarter rose 47 percent year-over-year to $746.8 million with most of the gain seen in European markets.

Domestic organic bookings growth increased to approximately 10 percent, up from around five percent in the last quarter of 2005, and European organic bookings growth increased to over 100 percent in the quarter, up from approximately 88 percent last quarter, said priceline.com president and chief executive officer Jeffery Boyd.

“As expected, most of this growth came from sales of retail hotel rooms supported by an increase of almost $12 million in online marketing spending in the first quarter. The revenue associated with these hotel bookings will be recognized at the time of stay, with a substantial portion of stays occurring in subsequent quarters and contributing to future growth in gross profit dollars and operating income.”

Organic gross travel bookings growth rates assume that acquired businesses were owned during all of 2005 and exclude the sale of Travelweb hotel rooms through Orbitz.

Boyd added: “Earlier this year, priceline.com launched an enhanced U.S. website that gives customers More Ways to Save than any other major online travel service. Visitors to priceline.com now can browse an easy-to-compare searchable grid of published prices and itineraries. If they choose, they can also use priceline.com’s Name Your Own Price service for greater savings.”

Priceline.com also will make suggestions if a change in travel plans will yield additional savings. These service enhancements are being supported by a new More Ways To Save-themed online and offline advertising campaign.

“Customers have reacted positively to the enhancements and to the campaign and priceline.com has experienced positive bookings trends for its domestic services this year, as evidenced by increased organic growth,” said Boyd.

Priceline.com issued the following guidance for 2nd quarter 2006: Year-over-year increases in overall gross travel bookings of approximately 45 – 50 percent; Gross travel bookings from Priceline Europe of approximately $300 to $320 million.

The company increased its full-year guidance as follows: Total gross travel bookings of approximately $2.9 to $3.1 billion; Gross travel bookings from Priceline Europe of approximately $1.1 billion; Pro forma net income of between $1.60 and $1.70 per diluted share.

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