No Priceline Negotiating After Earnings and Guidance

Priceline.com Incorporated (NASDAQ: PCLN) has just reported earnings for its second quarter and earnings came in at $7.85 per share on an adjusted basis and $1.3 billion in revenue. Thomson Reuters had estimates of $7.37 in earnings per share and $1.35 billion in revenue.

For the third quarter, Priceline put its earnings at $11.40 to $12.10 per share and it sees sales growth of 9% to 15% with gross travel bookings up 10% to 18%.  Thomson Reuters was calling for earnings of $12.82 per share and $1.8 billion in sales. The domestic gross travel bookings are expected to rise 5% while international gross bookings are expected to rise 12% to 20%.

The problem with this report is that Priceline was priced for perfection going into the earnings report. It is not just that Priceline is a high-beta and high-priced stock on a nominal basis. The valuation was over $33 billion at the report time before the reaction and that makes it worth more in market value than all of the major U.S. air carriers combined.

Shares closed up 2.2% at $679.80 against a 52-week range of $665.12 to $682.97 and against a consensus analyst target from Thomson Reuters of $797.47. Shares were initially trading down about 8.5% around $620.00 in the after-hours trading session following this earnings report. Now shares are down about 13% at 4588.00 after traders have had more time to understand the earnings report.

JON C. OGG