The price looks right for
Business is booming for
Late Thursday, the Internet travel booking company, said third quarter profits rose to $104.4 million, or $2.27 a share, from $47.8 million, or $1.05 a share, from the year-ago-period.
Meanwhile, sales rose 33.1% to $417.3 million. On a continuing operations basis, the company netted $71.5 million, or $1.58 a share. That was still above the Street's call. Analysts expected the firm to record profits of $1.28 a share, on sales of $387.5 million.
Despite lingering fears of an economic slowdown, the company said business was strong in the U.S. and abroad. In particular, the company's European site, Booking.com, saw a 97.9% increase in travel bookings, versus the year ago period.
Meanwhile, domestic bookings rose by 19%, as more Americans made hotel and rental car bookings. In addition, airline ticket sales were up 23%. Despite a no-booking-fee promotion, the company's year-over-year profit margins "were up substantially," the company said.
"Priceline.com's over-performance in the third quarter was driven by a combination of what we believe to be continued market-leading growth in our Booking.com international business and strong quarterly results from our domestic product lines," Priceline.com Chief Executive Officer
Priceline's European business has performed well for several quarters. In February, the company recorded profits of 58 cents a share, 18 cents above analyst expectations. The company has been able to maintain its momentum in Europe by adding more partners, expanding into new regions, and ramping up its marketing efforts. (See: "Priceline Rises on European Growth." )
With its European and domestic units clicking on all cyclinders, the company is setting its sights on Asia. On Thursday, the company said it acquired Agoda, a Southeast Asian online travel company based in Bangkok and Singapore. The site, like Priceline, specializes in discount hotel bookings for Asia, with hotel partners in Australia, China, Japan, India, South Korea, Indonesia, and more.
"With priceline.com's expertise, worldwide hotel inventories and customer demand, we see an opportunity to leverage Agoda and offer the most complete and compelling inventory and content to customers traveling in Asia," Boyd said. Last year, Agoda made $36 million, in gross travel bookings, which represented a year-over-year gain of 122%. Priceline.com has made several acquisitions over the last three years. In 2004, Priceline bought Active Hotels, a Britain-based company that specializes in hotel reservation. Then in 2005, the company purchased, Bookings B.V., another hotel booking site. These acquisitions were merged to create Booking.com.
Not all online travel sites performed well on Friday.