Investors cut Priceline a break

Shares still rise Friday, even as the company worries about competition and economic uncertainty.

By Jonathan Berr May 10, 2013 5:01PM
William Shatner, spokesman for Priceline.com, appears on the company's homepage on Feb. 26, 2013 (© Daniel Acker/Bloomberg via Getty Images)Shares of Priceline.com (PCLN) ended Friday on a positive note as investors applauded better-than-expected earnings from the online travel site made famous by actor William Shatner. Even lackluster earnings guidance from the company didn't stop the stock from closing up nearly 4% to $765.41.

In a statement accompanying the earnings report, CEO Jeffrey Boyd even spoke of "economic uncertainty" and "intense" competition -- phrases that ordinarily cause investors to flee. But this time, Wall Street essentially handed Priceline a rare "Get of Jail Free" card.

Why? The company's track record has been spectacular. Its stock has been one of the best -- if not the best -- performers in the S&P 500 ($INX) in recent years. The company continues to mint money. Its earnings expectations for the current quarter are between $8.87 to $9.45 per share, and though that's below the $9.59 per share analysts had expected, it is still well ahead the $7.85 per share reported a year earlier.

As Ascendiant Capital Group analyst Edward Woo told Bloomberg News: "The guidance is just them being conservative. They had generally OK to positive earnings. I wouldn’t be too concerned, even though the company said there are additional economic headwinds."

"OK" earnings for Priceline would be considered awesome by most companies. Net income for the first quarter rose 34% to $244.3 million, or $4.76 a share, even as executives hiked online advertising spending by an astounding 45%. Revenue surged 26% to $1.3 billion.

Still, while investors may have given Priceline a pass for this quarter, it's doubtful they will do it again.

--Jonathan Berr does not own shares of a the listed stocks. Follow him on Twitter @jdberr
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Tags: PCLN
3Comments
May 10, 2013 7:28PM
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Wow, just another example of your tax dollars well spend, does the president needs more than one plane ?? I feel that we bought it we should split the funds amongs the people who payid for it, us the American public. 
May 10, 2013 6:30PM
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If this healthcare plan is good for everyone else than it should be good for the people that voted it in. After all they are our representatives so they need to lead by exMLE.
May 10, 2013 5:22PM
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Hmmmmm!!
Buy a lot of land.....remove the wings.....makes a quite comfortable house I bet....getting the furniture in /out be a problem though.....jejejejejje
But overall....way cheaper than a house.....
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