On a GAAP basis, Priceline posted EPS of $10.89, which excludes an adjustment of $371,000 for unvested restricted stock units and performance share units.
For the third quarter, the company forecast a year-over-year increase of 15% to 25% in revenues and adjusted EPS in the range of $19.60 to $21.10. Based on last year’s third-quarter revenue of $2.27 billion, the company is looking at total revenues this year in the range of about $2.61 billion to $2.84 billion. The consensus estimates call for EPS of $21.28 on revenues of $2.8 billion.
Priceline added OpenTable, the largest of the restaurant reservation booking systems, to its stable in June for a price of $2.6 billion, paid in cash. The deal closed in late July. Last year, Priceline paid $1.8 billion to acquire flight comparison site Kayak.com.
The company’s CEO said:
We believe the Group delivered market-leading growth from both a top line and profitability perspective. … The business is performing well and we will continue to build our franchise by investing in customer experience, content expansion and market penetration.
Just last week, Priceline invested another $500 million in China’s leading online travel agency, Ctrip.com International Ltd. (NASDAQ: CTRP). Priceline’s stake in the Chinese company will rise to nearly 10% and give the company the right to appoint an observer to represent it at Ctrip board meetings.
The revenue miss and the weaker-than-expected forecast will weigh down Priceline’s shares today. The acquisition of OpenTable and the added investment in Ctrip are positioning the company to expand internationally, and that’s where the growth lies. In the near-term, though, returns might be a little less than those investors might be expecting.
Shares are down about 2.3% in pre-market trading, at $1,252.19 in a 52-week range of $928.80 to $1,378.96. Thomson Reuters had a consensus target price for the shares at $1,441.80 before today’s report.
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