Priceline.com: An Earnings Cycle Peak? (PCLN, EXPE)

Priceline.com Incorporated (NASDAQ: PCLN) may be at a cycle peak.  With shares above $400.00 and having more than doubled from its year lows, it would not be too much to point out that at a minimum the stock needs a breather.  The name-your-own online travel site reported earnings of $3.40 EPS on revenues of $731.3 million versus Thomson Reuters estimates of $3.09 EPS and roughly $735 million.

For the quarter ahead, Priceline gave guidance of $2.34 to $2.44 EPS versus $2.31 estimates from Thomson Reuters.  If you interpolate the 29% to 34% revenue growth from a year ago at $584.4 million, you get a range of over $753 million to over $783 million.  Thomson Reuters has estimates of $741.2 million.  The company ended the year with $1.66 billion in cash and its short-term investments.

Priceline is apparently not finished growing, and growth rates are being helped by Asia-Pacific and South America. The company sees travel bookings for its first quarter being up 45% to 50% from a year earlier after the gross bookings in the last quarter were up just over 44%.  The question is the quality of earnings at a time when you have just seen airline stocks take a double-whack due to the rise in oil prices.  It sees international gross bookings of 64% to 69% before currency and domestic gross bookings up 7% to 12%.

The discrepancy here over an earnings cycle peak or another round of growth is by how much it can grow its international operations versus domestic operations.  It is not fair to call this a completely mature story yet.  It is also far to ask how many years its international growth rates can continue at this same high rate versus domestic growth on the same week where you have seen oil rise from $87 to $100 per barrel. The answer may be tied to NASDAQ prices more than anything due to its outperforming price so far.

Expedia Inc. (NASDAQ: EXPE) saw its shares slide after sloppy earnings in the last couple weeks and it closed today at $20.32 versus a 52-week range of $18.30 to $29.85.  Priceline.com shares closed down 1.8% at $425.99 today versus a 52-week range of $173.32 to $464.47 and shares slid sharply by about 5% before recovering to just above $426.00 per share.  Until you have the conference call comments and the bias and reaction, consider this one unfinished business.

JON C. OGG