Priceline reported Q2 profit of $352 million or $6.88 a share and $1.33 billion in revenue. Last year PCLN earned $256 million or $5.02 a share and revenue of $1.1 billion respectively. Analysts were expecting revenue of $1.35 billion or $7.35 a share.
PCLN also lowered its guidance for Q3 to earn between $11.10 and $12.10 a share while analysts were expecting a number around $12.80. The company explained that they could blame the less than expected numbers on the Euro crisis. They had a 27% increase in bookings over last year’s results this quarter to $7.33 billion, with international bookings accounting for $5.95 billion of that number.
Hotel bookings increased 39% over last year while airline tickets decreased by 2%.
PCLN’s poor earnings were accompanied by competitor Orbitz’s (OWW) terrible earnings as well. In my opinion these stocks were very overvalued and must be humbly priced considering the current global economy and crippled travel industry. Some could argue that gloomy economic times would persuade travelers to use such discount sites, however I am not sure that anyone would use the sights more than their inceptions in the early 2000’s.
David Cornes holds a degree in economics from the University of Montana.
