Priceline Promotes Huston to CEO; Sales Exceed Estimates
Priceline.com Inc. (PCLN), the largest U.S. online travel agent, reported sales that topped analysts’ estimates and promoted Darren Huston to chief executive officer, ending Jeffery Boyd’s 11-year reign that saw the stock jump 100-fold.
Huston, head of Priceline’s Booking.com unit, will take the helm and join the board, and Boyd will stay as chairman, the company said in a statement today. Third-quarter sales rose 33 percent to $2.27 billion, topping analysts’ average estimate of $2.22 billion, according to data compiled by Bloomberg.
Under Boyd’s leadership, Norwalk, Connecticut-based Priceline has raced ahead of competitors such as Expedia Inc. (EXPE), propelled by growth in Europe, where hotels were slower to move reservations to the Web. Boyd orchestrated the 2005 acquisition of Amsterdam-based Booking.com, which now accounts for more than 80 percent of Priceline’s bookings.
“We expect Priceline’s share price to increase over the near term as it continues to experience solid revenue and earnings growth,” Edward Woo, an analyst at Ascendiant Capital Markets, wrote in a report last week.
Priceline shares rose as much as 4.8 percent to $1,072 in extended trading, after falling 3.3 percent to $1,022.89 at the close in New York. The stock has jumped 65 percent this year, while Expedia has declined 4.1 percent. Following the earnings report, Priceline shares initially dropped on a fourth-quarter profit forecast that fell short of analysts’ projections.
Boyd has been CEO of Priceline since 2002, overseeing a surge in sales and profit and helping bolster the stock from about $10 to more than $1,000. He moved the company from a U.S. site for reserving flights and some other offerings to the dominant service for booking hotels, the most profitable side of online travel.
Huston will become CEO and join the board Jan. 1. He moved to Booking.com in 2011 from Microsoft Corp. (MSFT)
Priceline’s third-quarter net income jumped 40 percent to $833 million, or $15.72 a share, from $596.6 million, or $11.66, a year earlier.
Profit, excluding some items, will be $7.80 to $8.30 a share in the current period, trailing the $8.34 average analyst projection, according to data compiled by Bloomberg.
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