Priceline profit higher as bookings jump

Priceline profit higher as bookings jump

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NEW YORK (Global Markets) - Online travel agency Priceline.com on Thursday posted a higher quarterly profit that topped analysts' expectations as strong growth at its overseas markets boosted bookings.

Priceline also forecast third-quarter profit above Wall Street expectations and its shares jumped 10 percent in after-hours trading to $532.56.

"People plan their summer travel in advance and they are taking their trips now even if they are somewhat concerned about the economy," Priceline Chief Executive Jeffery Boyd told Global Markets in an interview.

Boyd said he was seeing a slowdown in the rate of increase in hotel rates and airfare in the United States.

"Pricing is not as firm as it was a few months ago though it is still up year over year," said Boyd.

Last month, rival Expedia Inc posted a higher second-quarter profit as bookings increased by 19 percent. The company noted strong growth in hotel bookings.

Priceline's second-quarter earnings were $256.4 million, or $5.02 a share -- up from $115.0 million, or $2.26 a share, a year earlier.

Excluding some items, profit was $5.49 a share, above analysts' view of $4.91, according to Thomson Global Markets I/B/E/S.

Revenue rose 44 percent to $1.1 billion, mostly in line with expectations of $1.08 billion.

Bookings at Priceline, which runs Booking.com, Agoda.com and TravelJigsaw in addition to its namesake website, jumped 70 percent to $5.8 billion.

The company forecast third-quarter profit, excluding some items, of $9.10 to $9.30 a share and revenue growth of 37 to 42 percent.

It expects total travel bookings to grow 47 to 52 percent. This is slower than the 70 percent growth seen in the second quarter.

CEO Boyd said the moderating growth was due to tough comparisons with year-ago figures.

He also said as the business gets bigger, growth would slow over time.

Earlier on Thursday, JP Morgan assumed coverage of Priceline with an "overweight" rating and a $610 price target citing strength in the company's international business.

Priceline shares closed at $483.34 Thursday on Nasdaq.

The brokerage said there is still room for strong growth in Europe and a significant opportunity in South America and Asia.

(Reporting by A. Ananthalakshmi; Editing by Gary Hill)