(Corrects closing share price in second paragraph of a story that was published yesterday.)
Aug. 9 (Bloomberg) -- The four-year European debt crisis can’t seem to stop Priceline.com Inc.’s march to a $1,000 stock price and a record that was set during the dot-com bubble.
Priceline, the largest U.S. online-travel agent by market value, jumped 3.9 percent to $969.89 at the close in New York after reporting second-quarter sales that exceeded analysts’ estimates. Earlier, the shares rose as high as $994.98, topping an all-time high on a split-adjusted basis of $990 in 1999.
Since purchasing Amsterdam-based Booking.com in 2005, Priceline has counted on the European hotel reservation business for the bulk of its growth. Even with the economies of Spain, Greece, Ireland and Portugal requiring bailouts during Europe’s financial crisis that began in 2009, Priceline has bolstered its overseas business. International bookings surged 44 percent in the second-quarter from a year earlier, accounting for 85 percent of total bookings.
“When macroeconomic conditions were at their worst in the past year or so, Priceline’s international hotel business, the majority of which is in Europe, displayed extraordinary resiliency,” said Thomas White, an analyst at Macquarie Capital USA in New York, who has the equivalent of a buy rating on the stock. “The business has held up well through this and seemed to have emerged from the worst.”
Second-quarter revenue jumped 27 percent to $1.68 billion from $1.33 billion a year earlier, the Norwalk, Connecticut-based company said yesterday. Analysts on average had projected sales of $1.66 billion, according to data compiled by Bloomberg.
International bookings climbed to $8.6 billion from $6 billion a year earlier. In addition to the Booking.com acquisition, Priceline bought Bangkok-based Agoda.com in 2007 to expand its hotel reservation business in Asia.
“We still view it as a challenging environment from an economic perspective,” Jeffery Boyd, Priceline’s chief executive officer, said on yesterday’s conference call. “We were relatively pleased with the growth rates we saw in Europe.”
Priceline’s top rival isn’t faring as well. Expedia Inc. reported second-quarter profit and revenue last month that missed analysts’ estimates, leading to a 27 percent plunge in the stock, the steepest in eight years. The Bellevue, Washington-based company cited weakness in Southern Europe and reduced traffic from TripAdvisor Inc.’s site.
Priceline shares have gained 56 percent this year, compared with Expedia’s 18 percent drop.
When Priceline reached its bubble-era record, the company was known for its name-your-own-price option for airlines, hotels and other services and for its pitchman William Shatner. Between April 1999 and October 2000, a period when scores of dot-com companies failed, Priceline lost 97 percent of its market value.
“Congratulations to @Priceline on their stock price,” Shatner said in a Twitter Inc. post. “Wish I hadn’t sold my stock all those years ago.”
Chris Carley, a spokesman for Shatner, didn’t respond to a telephone call or e-mail for comment on his gains.
While Shatner, who played Captain Kirk on the “Star Trek” TV series, still promotes the brand, the company is very different with most of its revenue coming from hotels overseas. The number of hotel room nights sold rose 38 percent to 69.4 million from 50.2 million. Airline tickets sold increased 1.8 percent to 1.7 million.
Net income at Priceline rose 24 percent to $437.3 million, or $8.39 a share, from $352.4 million, or $6.88, a year earlier, the company said.
“It was an extremely good quarter for Priceline,” said Ron Josey, an analyst at JMP Securities in New York, who has the equivalent of a buy rating on the stock. “The thesis that they took market share has played out.”
Orbitz Worldwide Inc., another online agent, has also rallied in the past year and got a further boost yesterday after forecasting 2013 sales that exceeded analysts’ estimates. The stock jumped 37 percent to $12.62, a six-year high.
Priceline’s revenue in the third quarter will increase 23 percent to 30 percent, the company said. Analysts on average expect sales to rise 29 percent to $2.2 billion, according to data compiled by Bloomberg.
To diversify its business, Priceline acquired travel search engine Kayak Software Corp. for $1.8 billion in a deal that closed in May. Expedia is also competing in that market after buying a $630 million majority stake in Germany’s Trivago earlier this year.
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