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At the beginning of the year, the Priceline (NASDAQ:PCLN) Negotiator took a one way bus ride off the edge of a bridge that resulted in a massive explosion. The character, played by William Shatner, was presumed to be dead. His last words to a group of passengers that narrowly escaped the plunge were, “Save yourself…some money.” Now, it appears that Priceline is the one that needs some saving.
The discount travel company recently announced that after seven months of killing off the Negotiator, it will be resurrecting him in a new 30-second TV ad that debuts today, while the online ad is already available. “They told me what they were thinking, and I told them that was a good idea,” Shatner said. The new commercial features Shatner standing on a beach, staring at the ocean as a former spy who is trying to start a new life. It does not explain how he escaped death, but when approached by a man in a suit, the Negotiator says, “Surfing is my life now.” The two men wonder who will tell “the world that Priceline has even faster easier ways to save you money on hotels, flights and cars.”
While Priceline spokesman Brian Ek said the new commercial had been in the works for about a month, the boost in positive exposure was much needed. Shares of the company plunged 17 percent in a single trading session last week after providing a weaker-than-expected outlook. For the third quarter, the company now expects profit excluding items in the range of $11.10 to $12.10 per share, well below the $12.76 expected by analysts. Priceline also reported second quarter revenue of $1.33 billion, falling short of the $1.35 billion predicted by analysts.
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“In terms of the growth assumptions, we said that our forecast reflects the actual results we’ve seen to-date and we’re assuming fairly significant deceleration growth rates from here on – over concern about macroeconomic conditions and our worry that conditions will worsen particularly in Europe which is such a key market for us,” explained Jeffery Boyd, chief executive officer. Competitors Orbitiz Worldwide (NYSE:OWW) and Expedia (NASDAQ:EXPE) also declined on Priceline’s financial results. Other companies such as McDonald’s (NYSE:MCD) and Chipotle Mexican Grill (NYSE:CMG) have also been hit hard due to the European slowdown.
Shares of Priceline (NASDAQ:PCLN) are up 4.48 percent since Wednesday, but will the return of the Negotiator provide long-term support? Although headlines have taken a break from European drama, investors should keep in mind that nothing has changed in the region. The same headwinds facing Priceline and its reduced outlook still remain. Growth in the 17-country currency is still slowing and the insolvency crisis appears to have no end in sight. Earlier this week, the European Union’s statistics arm announced that economic activity in the euro zone fell at an annualized rate of 0.7 percent in the second quarter. Germany, the economic powerhouse of the euro zone, also slowed to an annualized rate of just 1.1 percent.
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