It's a shame that most airlines aren't run like Priceline.com
Once again, the travel website has landed ahead of schedule, delivering its ninth consecutive quarter of better-than-expected profits. Revenue soared 44% to $514.0 million. Pro forma net income ascended 40% to $1.55 a share. Wall Street was buckled in for just $1.41 a share in adjusted earnings on $495.7 million in revenue.
Priceline has made success a habit. It doesn't simply buzz the control tower every three months -- it flat-out overshoots expectations by a wide margin.
|
EPS |
Est. |
Difference |
|
|---|---|---|---|
|
Q3 2007 |
$1.58 |
$1.28 |
23.4% |
|
Q4 2007 |
$0.96 |
$0.84 |
14.3% |
|
Q1 2008 |
$0.76 |
$0.60 |
26.7% |
|
Q2 2008 |
$1.55 |
$1.41 |
9.9% |
Source: Earnings.com
The stock opened 13% lower this morning, despite besting the perpetually humbled pros by nearly 10%. It may be that spoiled investors have grown used to bigger surprises. It may be that the shares rallied heading into the report. It may also be that the company upped its guidance for the rest of the year, but did so in a cautionary tone as the online travel industry bumps up against economic weakness and airlines scaling back on their flight schedules.
The market's reaction is a pity, because Priceline -- and to a lesser extent Expedia
Sure, investors can find growth in online travel overseas. In China, you have Ctrip.com
However, investors can also get a little global sizzle with Priceline. More than $1.2 billion of the $2.1 billion in gross travel bookings made by Priceline during the second quarter were international.
So go ahead and let Mr. Market delay Priceline's flight today. It still knows where the runways are, giving investors an attractive entry point ahead of next quarter's report.
Other ways to fly higher:
