PCLN 2009 Q2 Earnings

Announced before the opening bell on August 10, Priceline.com Inc. (PCLN) confirmed that the company’s profits during the 2Q surged over the prior year’s results, in large part due to better-than-anticipated demand for their leisure travel services.

For the company’s most recent period, Priceline recorded net income of $67M, or $1.38 per share, in contrast to last year’s earnings of $49.8M, or $1.00 per share, an increase in year-over-year profits of nearly 35%. Excluding one-time charges to the company’s bottom-line, Priceline would have earned $2.02 per share in the latest quarter.

In the meantime, quarterly sales came in nearly 18% higher than the same period a year ago, advancing from $514M to $603.7M.

President and CEO Jeffery H. Boyd commented on Priceline’s results, "Despite a difficult economic climate, leisure travel demand for the summer peak season has been stronger than expected, driven in part by the availability of compelling discounts. 2nd quarter performance reflects the impact of improving demand, but also shows the impact of lower year over year unit prices."

Analysts, within the industry, were looking for the online travel company to post quarterly earnings of $1.75 per share, excluding one-time items, on total sales of $575.1M.

Best known for their “name your own price” auctions, Priceline witnessed a major boost from the total value of online bookings, which jumped nearly 13% from last year’s results, climbing to $2.38B.

Direct sales to customers online advanced from $336.2M to $392.8M, an increase in revenues of almost 17% year-over-year. Furthermore, sales generated from agencies increased from $173.2M to $204.5M, a jump in revenues of more than 18% from last year’s results.

As a by-product of the current economic turmoil, the travel business has been greatly impacted by the lack of demand from customers withholding any discretionary funds. In order to combat these situations, Priceline, as well as other travel companies, have instituted countless incentive programs and have done away with fees associated with online bookings.

These initiatives were also apparent during the company’s 1Q earnings report, which showed an 81% increase in net income, surging from earnings of $13.8M, or $0.28 per share in the prior year’s 1Q, to $25M, or $0.53 per share in the 1Q o 2009.

Boyd later added, “Unemployment and the global economic downturn continue to affect travel spending, particularly high yield business travel, which places considerable strain on travel suppliers. Suppliers have responded with promotions and discounts to spur leisure demand and we have offered distribution and advertising support for those efforts, which we believe has helped bolster occupancy and load factors."

Through the first six months of the year, Priceline has reported net income of $92M, or $1.92 per share, versus $63.6M, or $1.28 per share during the same period last year. Total revenues during the six-month span tallied $1.07B, up from $917.1M.

Looking ahead to the company’s 3Q, Priceline is expecting net income to come in between $2.70 and $2.85 per share. On a year-over-year basis, the company is looking to post increases to overall revenues between 19% and 23%.

Analysts, on average, are looking for yearly results from Priceline to earn $2.52 per share with annual revenues coming in at $613.5M.

Following the company’s announcement, shares of PCLN surged more than 14%, adding $18.92 to close the day at $150.24 per share. The August 10 closing price established a new 52-week trading high. Shares of Priceline have also traded as low as $45.15 per share, which was established in late October.

By BetterTrades