Priceline.com Stock Exploders Higher to $632 Per Share After Earnings

Priceline.com (NASDAQ:PCLN) has been one of the momentum stocks of the past few years which has not participated as much in 2012.  Until the past few weeks it has been range bound in a massive area of $440 to $560 for much of latter 2011 and early 2012.  That changed a few weeks ago, and last night’s earnings report soothed the concerns over the business, which is heavily focused on Europe.  The stock has gapped up and like just about every stock this quarter, reducing exposure ahead of earnings has been an exercise in lost opportunity.

(as an aside if these large dollar stocks are hard for you to digest, simply take off the zero at the end of the price – i.e. think of Priceline jumping from the $59s to $63s today.)

The growth metrics here continue to impress – revenue up 35% and EPS (ex items) up 58%.

  • Priceline reported earnings of $226 million, or $4.41 a share, on revenue of $991 million, up from a profit of $135.7 million, or $2.66 a share, on $731 million in sales in the same period a year ago. Excluding one-time charges, Priceline would have earned $276.8 million, or $5.37 a share, to top the estimates of analysts surveyed by FactSet Research, who forecast Priceline to earn $5.06 a share on $969.3 million in revenue.

Once more, this is another in the pantheon of “U.S. companies” that are very international in nature

  • Gross bookings, the dollar value of all travel services bought by consumers, surged 52% to $4.96 billion. They shot up 65.5% overseas vs. 16% in the U.S.
  • Global hotel room reservations soared 53%. Airline ticket bookings grew 6%. Car rental days jumped 34%.

The earnings forecast also beat expectations by analysts but revenue was a tad light.

  • For the current quarter, Priceline expects to earn $3.80 to $3.90 a share, excluding special charges, on a 22% to 27% revenue gain. Analysts sees EPS of $3.72. But the 24.5% midpoint of the sales increase was less than the 25.2% that analysts had forecast.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). Trader Mark also authors the blog Market Montage.

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