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Priceline Names Itself Profitable

Name-your-price e-commerce company Priceline.com named itself a little pro forma fourth quarter profit (excluding restructuring and other special charges), reporting net income of $3.3 million, or 1 cent per share.

That compares to a fourth quarter 2000 pro forma net loss of $25 million, or 15 cents per share.

Revenue in the quarter was $235.3 million, which was at the high end of guidance provided on Nov. 1 and compares to year-ago quarterly revenue of $228.2 million -- and this despite the events of Sept. 11 in the fourth quarter and their subsequent effect on travel.

Still, on a GAAP basis, Norwalk, Conn.-based Priceline reported a fourth quarter 2001 net loss of $1.3 million, or 1 cent per share, compared to a net loss of $105.1 million, or 62 cents per share a year earlier.

Analysts on average had expected the company to break even on a per-share basis and to post revenues of $225.5 million.

"Priceline performed well in the fourth quarter, achieving year over year growth in revenue and pro forma earnings, despite continuing weakness in airline retail pricing and, consequently, in our airline ticket bind rate," said Jeffery H. Boyd, the company's president and COO.

"We continue to diversify our revenue streams to non-air businesses, with hotel and rental car bookings constituting 47 percent of booked offers in the fourth quarter 2001, up from 31 percent in the fourth quarter 2000, and we are poised to benefit from the launch of our new vacation product and marketing alliances as well as from the eventual recovery of retail airline pricing," he said.

For the year, Priceline.com posted revenue of $1.17 billion, compared to full-year 2000 revenue of $1.24 billion. The company said it had pro forma net income in 2001 of $15.1 million, or 7 cents per diluted share, compared to a pro forma net loss of $36.1 million, or 22 cents per share in 2000.

Looking forward, Priceline "...is targeting first quarter 2002 revenue of between $260 million and $290 million, consistent with our expectation that ... low retail airline pricing will continue to put pressure on our bind rate." said Richard Braddock, chairman and CEO. "We are managing the first quarter to a goal of between zero to two cents pro forma earnings per share, including the effects of a significant increase in online and off-line marketing spending and one cent of loss generated by consolidating our European operations."

"...we are comfortable with median First Call estimates for full-year 2002 pro forma earnings per share of 12 cents," Braddock said.

Analysts expect the recently announced deal with eBay for the creation of a travel booking center on the auction site to give Priceline a nice boost in 2002.