Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and priceline.com (PCLN +0.38%) is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Priceline has taken the travel-portal space by storm, launching beyond its name-your-own-price auction gimmick to turn its impressive worldwide network of offerings into profits. Let's take an early look at what's been happening with Priceline over the past quarter and what we're likely to see in its quarterly report next Tuesday.
Stats on Priceline
|
Analyst EPS Estimate |
$6.54 |
|
Change From Year-Ago EPS |
22% |
|
Revenue Estimate |
$1.19 billion |
|
Change From Year-Ago Revenue |
20% |
|
Earnings Beats in Past 4 Quarters |
4 |
Source: Yahoo! Finance.
Will Priceline fly higher this quarter?
Analysts have been pretty comfortable with their calls on Priceline's earnings over the past few months, with consensus moving by a penny or two in either direction. The stock, though, has continued to head higher, rising more than 7% since mid-November.
Arguably the biggest news of the quarter for Priceline came when it announced it would buy Kayak (NASDAQ: KYAK) in a $1.8 billion deal. Given the huge amount of search data that Kayak has, Priceline expects that the purchase will give it an inside edge over its rivals. Without access to Kayak's data, Orbitz Worldwide (NYSE: OWW) and Expedia (EXPE 0.80%) will find themselves at a competitive disadvantage, or at the very least have to duplicate Kayak's efforts to maintain a comparable knowledge base to base their own deals on.
But Priceline isn't just stopping with Kayak. It also forged a deal with Ctrip.com (CTRP +3.91%) in an effort to cash in on the fast-growing international markets, especially among travel-hungry Chinese tourists. By sharing access to its portfolio of hotels, Priceline is cementing its leading role overseas in a way that U.S. investors may not appreciate as much as they should.
In Priceline's earnings report, look for the company to take a critical look at its ongoing competition with Expedia, which has had great success in turning around its once-struggling business. Moreover, Priceline should be able to give particular insight into Europe's woes and the impact they could have on travel activity going forward. With the shares well below their highs from last spring, Priceline has room to move higher if it gives investors good news.
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