Source: Priceline.

One secret on Wall Street is that if you set expectations low, it's easier to deliver positive surprises. Online travel portal Priceline Group (NASDAQ:BKNG) has excelled at doing just that, with a habit of issuing guidance that proves overly pessimistic and then posting results that dramatically exceed its own expectations. In Thursday morning's release of its fourth-quarter financial report, Priceline once again made good use of that strategy, with sales and earnings growth that not only crushed its own guidance but also far surpassed what those following the stock had expected. Yet with Priceline also setting low expectations for the first quarter of 2015, are investors right to think of the company as simply crying wolf once too many times? Let's look more closely at Priceline's results from last quarter and what they say about the future.

A big boost for Priceline
Priceline's fourth-quarter revenue soared 19% to $1.84 billion, surpassing the high end of the 11% to 18% range the company had predicted. Adjusted earnings of $10.85 per share even more persuasively topped Priceline's outlook range of $9.40 to $10.10 per share. Adjusted net income climbed 22%, and gross travel bookings rose 17% to $10.7 billion despite the negative impact of the strong U.S. dollar, which took away about 6 percentage points of growth.

Looking more closely at the results, Priceline pointed to the success of its international business even in a time of turmoil economically. CEO Darren Huston noted that international gross bookings grew 27% on a currency-neutral basis during the quarter, which he said in a press release "demonstrates the resilience of the business, despite an environment of economic uncertainty and foreign exchange volatility" that could otherwise have weighed on its results. Huston also noted that Priceline's hotel and rental-car volume grew, and 28% growth in full-year room-night reservations pushed gross bookings above $50 billion in 2014.

Source: Priceline.

Once again, Priceline's various segments showed the changing focus of its business. Agency revenue climbed 23%, with the company's site providing a substantial portion of its sales on the agency side. By contrast, merchant revenue, which includes the company's trademark "name your own price" bidding system, fell by less than 1 percentage point. Advertising sales more than doubled from year-ago levels; while Priceline still only gets about 7% of its revenue from advertising, the segment nevertheless gained prominence throughout the year.

How 2015 could send Priceline flying
As we've seen countless times before, Priceline painted a gloomier picture for the first quarter of 2015. Its guidance included targeted revenue growth of 4% to 11%, well below the 13.5% rate most investors expect, and it particularly sees a heavy impact from adverse currency movements. Gross travel bookings growth of 2% to 9% indicates a 12-percentage-point hit due to foreign exchange. Those impacts also weighed on Priceline's earnings expectations, with guidance for adjusted earnings of $7.20 to $7.75 per share compared to consensus figures around $8.50.

CEO Darren Huston. Source: Twitter.

Yet Huston sees better things ahead. In addition to efforts to promote organic growth, Priceline will continue to put money into OpenTable and the company's BookingSuite hotel-marketing services. Those investments could weigh on short-term results, Huston said, but he sees them as "the right investments to plant seeds for future growth."

Of even more interest, Priceline announced a $3 billion authorization to repurchase stock. With shares having recently lost as much as a quarter of their value from the 2014 high, Huston said "we believe that buying our stock is a wise investment of our capital and demonstrates our confidence in the long-term outlook for our business."

Investors clearly agreed, bidding the stock higher by about 7% in the first hour of pre-market trading after the announcement. Priceline faces heightened competition from its traditional rivals in the online travel space, as consolidation within the industry has drawn battle lines that will play a big role in determining the company's success compared to that of its foes. Yet Priceline has demonstrated its superiority in the past, and with strategic moves to fill in gaps in its business, the company has plenty of promise to justify its share-price gains throughout 2015 and beyond.