Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Priceline Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of discount travel website (Nasdaq: PCLN  ) plunged 15% today after its quarterly results and outlook came in below Wall Street expectations.

So what: Priceline's second-quarter profit managed to beat estimates on strong bookings, but a small miss on the top line -- revenue of $1.33 billion versus the consensus of $1.35 billion -- coupled with downbeat guidance for the current quarter, reinforces concerns over its exposure to weakening conditions in Europe. In fact, close rival Orbitz Worldwide (NYSE: OWW  ) also issued a gloomy outlook today as the European turmoil weighed on travel plans, giving investors little hope for a near-term turnaround in the space.

Now what: For the third quarter, Priceline now sees adjusted EPS of $11.10-$12.10 on revenue of $1.58 billion-$1.67 billion, well below Wall Street's view of $12.82 and $1.8 billion, respectively. "Given the uncertainties surrounding worldwide economic conditions, particularly in Europe where much of our business is concentrated, the variability around our guidance is greater than as usually the case," CFO Daniel Finnegan said in a conference call with analysts. Of course, with the stock now off more than 25% from its 52-week highs and currently trading at a reasonable forward P/E, much of that macro uncertainty might already be baked into the price.

Interested in more info on priceline? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Motley Fool newsletter services have recommended buying shares of Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1977183, ~/Articles/ArticleHandler.aspx, 10/27/2016 10:47:23 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,177.18 -22.15 -0.12%
S&P 500 2,134.82 -4.61 -0.22%
NASD 5,241.48 -8.79 -0.17%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 10:31 AM
PCLN $1469.85 Up +0.69 +0.05%
Priceline Group CAPS Rating: ****
OWW.DL $0.00 Down +0.00 +0.00%
Orbitz Worldwide CAPS Rating: *