Priceline Expected To Fly High – US-FOREX.US
Online travel sites like Orbitz and Expedia are seeing demand stabilize as low airfares and reduced hotel rates entice consumers to book travel. The downside is that the value of bookings has dropped, forcing sites to keep costs low while the global recession continues to temper travel and leisure spending. Expectations are high for priceline.com
, which is reporting second-quarter earnings on Monday, since both Orbitz
and Expedia
surpassed the Street’s estimates. Like its competitors, priceline.com is expected to report improved bookings but declining order values as companies throughout the travel industry are offering discounts to spur sales. On July 30, Expedia said booking declines improved from the first quarter although the value fell 5%, to 5.6 billion. On Wednesday, Orbitz also said the number of transactions improved but values were 12% lower.Expedia’s results prompted Soleil to raise its priceline.com estimate for a second time since mid-July. “Expedia reported acceleration in international room volume to 37% and it exceeded margin expectations on marketing efficiency. Expedia may be gaining some ground in Europe, but our sense is that the online hotel category there remains very strong and priceline.com is the leader,” said Soleil analyst Jake Fuller, adding that the company should also benefit from scaled-back European advertising by Orbitz and Travelocity.Fuller now expects a quarterly profit of 1.80 a share, up from 1.76. His concerns about priceline.com are its heavier weighting in Europe, where hotel room rate trends lag those in the U.S., and intensified competition from rival sites.