Priceline Tanks On Soft Guidance: Iceland Volcano, Thailand, Weak Euro To Blame

upside down plane

Priceline shares are down ~11% after hours after the company reported solid Q1 results but soft Q2 guidance. Here’s a first take from JPMorgan analyst Imran Khan. Sounds like any problems at Priceline are one-offs because of the Iceland volcano and situation in Europe and Thailand, and not a permanent problem.

  • 2Q’10 guidance is conservative as expected. The company guided for total gross bookings growth of 32.5%-37.5% vs. our estimate of 37.4% growth. Revenue guidance was for $712M-$743M vs. our estimate of $723M and consensus of $756M. Pro forma EPS guidance is for $2.50-$2.70 vs. our estimate of $3.05 and consensus of $2.82. We note that guidance included ~$10M impact to EBITDA from the volcano and was based on an FX rate of $1.27 vs. our prior est. of $1.38. If 2Q EPS guidance is adjusted for these factors, we think it would be in line with consensus.
  • Gross booking grew 53% Y/Y vs. our estimate for 48%. Domestic gross bookings grew 16% Y/Y vs. our estimate of 15%. International gross bookings grew 81% (73% ex FX) vs. our estimate of 73% (64% ex FX).
  • 1Q EBITDA was $112M vs. our estimate of $108M. EBITDA margin was 19.2%, above our estimate of 18.4%.
  • Pro forma EPS totaled $1.70 vs. our estimate of $1.64.

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