Priceline profits up 82 percent on increased bookings

www.priceline.com

For the first quarter of 2009, Priceline.com reported that its profits soared by 82 percent on strong bookings and revenue growth. It has projected results for the second quarter that are above analyst estimates.

Although the online travel industry overall has been affected by global economic conditions, with consumers cutting back on travel, Priceline.com has seen business migrating to it from its rivals. As well as the typical offerings of flights, car rentals and hotels, the online operator features a name-your-price booking function which allows consumers to make bids at potentially significant discounts. Suppliers can pre-determine how low a price they will accept.

Recently, Expedia and other competitors waived bookings fees on flights and reduced the fees on other bookings. Although Priceline.com doesn’t charge flight booking fees, it could lose some of its advantage because of the well-published initiatives launched by its rivals.

The company is projecting an increase in second-quarter revenues of 8-13 percent, with earnings of $1.65-1.75 per share. A poll of analysts by Thomson Reuters shows an expectation of earnings to be $1.65 per share, with revenue growth at five per cent, to $542 million.

Priceline.com’s chief executive, Jeffery H. Boyd, reported an increase in competition as the quarter ended when rivals cut booking fees and the outbreak of swine flu caused a slump in demand.

For more information on this article please visit online.wsj.com.

www.priceline.com