Priceline Shares Jump Most in 3 Years as Profit Tops Estimates

  • Forecasts profit of $9 to $9.60 a share in first quarter
  • Sales reach $2 billion, compared with $1.96 billion estimate

Priceline Group Inc., the largest U.S. online travel agent, jumped the most in more than three years after reporting fourth-quarter earnings that beat analysts’ estimates and the company’s own forecast.

Earnings, excluding some items, were $12.63 a share, the Norwalk, Connecticut-based company said Wednesday in a statement, exceeding the average estimate of $11.73. Sales were $2 billion, compared with an estimate of $1.96 billion. Priceline had said in November that fourth-quarter profit would be $11.10 to $11.90 a share because of the stronger U.S. dollar.

Priceline jumped 12 percent to $1,241.05 at 10:18 a.m. in New York, its biggest intraday increase since November 2012.

Travel bookings grew 10 percent to $55.5 billion in 2015, the company said. Were it not for currency-related losses, bookings would have grown 25 percent. Priceline, which makes less than a quarter of annual sales in the U.S., is more susceptible to currency fluctuations than rival Expedia Inc., which does most of its business in the U.S. The dollar gained 9 percent in 2015 versus a basket of 10 leading currencies, according to data compiled by Bloomberg.

The bookings increase showed “solid execution” even after the Paris terrorist attacks in November put a damper on international travel, Mandeep Singh, an analyst with Bloomberg Intelligence, said in an e-mail.

Priceline forecast first-quarter profit of $9 to $9.60 a share, compared with an average estimate of $9.52.

Chief Executive Officer Darren Huston and Chief Financial Officer Daniel Finnegan repeatedly referenced the greenback’s strength during a conference call with analysts, and said the currency’s effect would be less pronounced through the rest of the year.

“Although we worry about macro weakness evident in slowing economic growth, dropping oil prices and stock market volatility, the macro travel environment appears healthy to us,” Finnegan said. “Lower oil prices have contributed to significantly lower airline ticket prices that leave consumers with more discretionary funds that are available for travel.”

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