Shares of online travel agencies traded mixed Thursday, as investors reacted to earnings report from Priceline.com Inc. and anticipated Expedia Inc.’s third-quarter results after the closing bell, reported AP.

Published: 09 Nov 2006

Shares of online travel agencies traded mixed Thursday, as investors reacted to earnings report from Priceline.com Inc. and anticipated Expedia Inc.’s third-quarter results after the closing bell, reported AP.

Priceline’s net income for the three months dropped to $47.8 million, or $1.05 per share, from $170.6 million, or $3.71 per share, in the year-ago period. The company said that its quarterly revenues grew 21.1% to $313.5 million, from $258.8 million in the same period a year earlier.

For its fourth-quarter, Priceline.com guided to a 15 percent jump in revenues, from the year-ago level. The company also raised its net income guidance to $2.37-$2.67 per share, from the previously guided $2.15-$2.40 per share.

Priceline chief executive officer Jeffery Boyd said, “Priceline Europe had an excellent quarter, with gross travel bookings of $398 million in the third quarter 2006, which represents an organic growth rate of approximately 121 percent.”

On the fourth quarter, he said, “Average holiday travel costs already are running well ahead of last year. We believe this puts priceline.com in a favorable competitive position versus other online travel reservation services.”

According to AP, Piper Jaffray analyst Aaron Kessler maintained an “Outperform” rating and raised his price target to $55 from $42 on strong international bookings and wrote in a note to investors that the guidance may yet prove conservative.

In the same report, CIBC analyst Paul Keung, who rates the stock “Market Weight”, shared: “We believe the increase in guidance reflects recent share buybacks and lower share dilution from a converts swap, rather than improved operating trends. In fact, Priceline’s European bookings growth decelerated in early fourth quarter.”

In morning trading, Priceline.com's stock gained more than eight percent to a new 52-week high of $43.80, but by early afternoon shares had retreated to a gain of 23 cents at $40.63. In the past year, the stock has ranged from $21.06 to $41.49, as per the information available.

Shares of Sabre were up 6 cents to $26.25 in afternoon trading Thursday on the New York Stock Exchange, after earlier hitting a new 52-week high of $26.41.