Priceline Finds It Likes the Hotel Biz

Helped out by hotel room sales, Priceline.com Inc. ,
reporting after the closing bell, said it made 2 cents a share on a GAAP
basis for the first quarter, which was exactly what analysts on average had
been expecting.


The name-your-price company said that net income for the quarter was $3.9
million, compared to a loss of $13.8 million, or 7 cents per share, for the
same period a year ago.


Revenues came in at $261.9 million, which was within the company’s previously
stated guidance range for the quarter, but just barely. The figure was down
slightly from revenue of $269.7 million a year earlier. The company’s
guidance had called for revenues of $260 to $290 million.


Bright spots included hotel room sales, which posted a 110 percent
year-over-year gain in room-nights sold. And Priceline said that its customer
base topped 13.5 million.


“While our airline ticket business remained under pressure from airline fare
sales and constrained availability, particularly in the late-March Easter
vacation period, solid results in our other travel products, a continued
strengthening of our consumer franchise and continued expense discipline
resulted in another profitable quarter…” said Jeffery H. Boyd president and
COO.

However, in a conference call to discuss the fnancial results, Priceline
Chairman and CEO Richard S. Braddock said that “we are seeing signs of ticket
price recovery as the airlines raise fares.”


Priceline said it sold a combined 2.5 million units of travel products and
continued to diversify its revenue streams to non-air businesses, with hotel
and rental car unit sales constituting 66 percent of total travel unit sales
in the first quarter, up from 49 percent a year earlier.


Priceline.com sold more than 909,000 hotel room nights during the quarter,


In February, Norwalk, Conn.-based Priceline reported fourth-quarter net income (pro forma) of $3.3 million, or 1 cent
per share on revenues of $235.3 million.

“Looking forward, Priceline.com is targeting second-quarter 2002 revenue of
between $320 million and $350 million, and pro forma earnings per share of 3
to 5 cents,” said Braddock. “This range is consistent with our expectation
that the most significant growth in the quarter will come from our non-air
products. On that basis, we remain comfortable with a target for full-year
pro forma EPS of 12 cents a share.”


One expense the company won’t have this year is a whopping tab for executive
severance.


Last year, former CEO Daniel H. Schulman, who was forced out, collected
$683,332 in salary — $600,000 of it just
for stepping out of the way.


Priceline named
its chairman
, Braddock, to replace Schulman on May 8 last year. Priceline
had seen its share price plunge to as little as $1.06 after it ran into
problems in the fall of 2000.

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