Priceline beats consensus EPS estimates on strong travel booking growth, guides in-line (PCLN 2Q05 earnings results)

Priceline (ticker: PCLN) reported Q2 2005 earnings results that beat consensus pro-forma EPS estimates by $0.04.
Key stats from the quarter:

Q2 Results
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Revenue rose 2.8% to $266.6 million in-line with consensus.
• Merchant revenue fell 1.3% to $246.5 million.
• Agency revenue rose 115.6% to $18.9 million.
• Gross margin was 24.5% vs 20.7%.
• Operating expenses rose 24.8% to $53.4 million.
• Offline advertising expenses fell 15.9% to $8.1 million.
• Online advertising expenses rose 80.8% to $12.2 million.
• Sales and marketing expenses rose 11.2% to $10.1 million.
• Personnel expenses rose 23.6% to $9.8 million.
• G&A expenses rose 22.4% to $5.5 million.
• IT expenses rose 13.1% to $2.8 million.
• Operating income rose 7.6% to $11.8 million.
• Operating margin was 4.4% vs 4.2%.
• Net income rose 8.6% to $12.4 million.
• Net margin was 4.6% vs 4.4%.
• GAAP diluted EPS of $0.29 vs $0.28.
• Pro-forma diluted EPS of $0.41 vs consensus estimate of $0.37.

Balance Sheet (as of June 30, 2005)

• Cash and equivalents of $118.3 million.
• Restricted cash of $22.0 million.
• Short-term investments of $137.6 million.

Other

• Gross travel bookings rose 20.3% to $569.5 million.

Q3 Guidance
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Revenue to rise 2.5% vs consensus estimate of $262.14 million (Editor: Q3 2004 revenue of $235.9 million -- a 2.5% increase results in $241.8 million).
• Pro forma gross profit to rise 40% - 42%.
• Pro forma net income of $0.34 - $0.40 per diluted share vs consensus estimate of $0.38.
• Gross travel bookings to rise 35% (Editor: Q3 2004 gross travel bookings of $432 million -- a 35% increase results in $583.2 million).
• Note: See pro-forma explanations here. See Priceline's Q3 2004 earnings results here.

FY 2005 Guidance

• Pro-forma diluted EPS of $1.20 - $1.30 vs consensus of $1.24.
• Note: See pro-forma explanations here

PCLN chart.

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