Pcln Swimmer
Source: Priceline Group.

Time and time again, online travel giant Priceline Group (NASDAQ:PCLN) has found ways to outperform the expectations of investors. Going into its second-quarter report on Wednesday morning, Priceline investors are actually expecting the company to have a brief earnings-growth stall, having reacted to calls in the travel portal's first-quarter report that suggested the potential for slowing growth. Yet with a long track record of giving conservative guidance and then beating it soundly, Priceline could well be setting shareholders up for another strong quarter. Let's take a closer look at Priceline and what investors should really expect in its latest numbers.

Stats on Priceline Group

Analyst EPS Estimate

$11.98

Change From Year-Ago EPS

(4.2%)

Revenue Estimate

$2.27 billion

Change From Year-Ago Revenue

6.7%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Can Priceline Group earnings visit new frontiers?
As we've seen in most past quarters, investors have been nervous about Priceline Group earnings in recent months, slashing their second-quarter projections by more than $1 per share and making similar-sized cuts to their full-year 2015 and 2016 estimates. Unlike recent history, though, Priceline stock hasn't really budged over the past quarter, being essentially flat since late April.

The nervousness about the current quarter all came from Priceline's first-quarter earnings report in May. The travel giant's first-quarter results easily topped what investors had expected to see, with sales climbing 12% and adjusted earnings of $8.12 per share beating Priceline's guidance range by 5% to 13%. Yet despite solid growth in its Agency segment, Priceline projected further weakness for the second quarter, with guidance that suggested sales wouldn't grow more than 7% and could remain flat. Earnings projections for $10.95 to $11.75 per share were also substantially below the more than $13-per-share consensus among those following the stock, and that created substantial share-price weakness throughout much of the quarter.

Priceline hasn't let any concerns about its future growth stop it from making important strategic moves. In late May, the company boosted its potential stake in Chinese travel portal Ctrip.com International, buying $250 million in convertible bonds that if exercised could give Priceline a more than 10% stake in Ctrip. The move is just the latest demonstration of Priceline's overarching belief that international markets have more long-term growth potential than the lucrative U.S. market, and the company has done a good job of outpacing its peers in expanding across the globe and tapping into new demand. In particular, as the rise of a consumer class in many emerging-market countries continues, more people will want to travel, and Priceline wants to be where they turn to make their bookings.

For now, though, investors need to prepare themselves for the ongoing impact of the strong U.S. dollar on the company's results. The silver lining of weak foreign currencies is that they entice more U.S. travelers to go abroad, with their dollars going further in terms of purchasing power. Priceline projected that foreign-currency impacts could cost it 15 percentage points of growth in the second quarter, and a failure to appreciate Priceline's underlying growth in constant-currency terms that underlies its deflated dollar-denominated results could be a key factor in holding the stock back recently.

In Priceline's earnings report, investors should bear in mind that with the stock having taken a break in its upward trend over the past few months, it's more likely this quarter that positive results could spur the share price to rise. Still, the best thing for long-term investors to do is to keep your eyes on the fundamentals, watching to see whether Priceline can continue its big-picture strategy of weaving its way into the fabric of travel around the world. With mixed results from some of its biggest rivals in the U.S. market so far this quarter, Priceline has a chance to prove it remains the undisputed leader in the industry and can outgrow its competition through a combination of disciplined strategic planning and thoughtful tactical moves to solidify its strong position in travel.

Dan Caplinger owns shares of Priceline Group. The Motley Fool recommends Ctrip.com International. It recommends and owns shares of Priceline Group. 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 Motley Fool has a disclosure policy.