Every analyst has a different take on Priceline's earnings

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We all know the story of the seven blind men who each attempt to describe an elephant, and while the analogy is almost certainly unfair to the blind (as well as to the elephants) it is unavoidable today in light of the many different conclusions drawn by financial analysts upon examining (or at least skimming) this morning's second quarter 2014 earnings report from Priceline ( PCLN ).

To get the simplest numbers out of the way, Priceline reported earning $12.51 per share, where the consensus estimate was $12.04 per share. The whispered number, if you believe in such things, was higher than $12.04, but not as high as $12.51. That's an earnings win. Priceline's revenue rose 26.4% year over year, coming in at $2.12 billion for the quarter, where the consensus estimate was $2.14 billion. That's a neutral revenue report.

The company forecast earnings for the third quarter between $19.60 and $21.10 per share, where the Street was expecting $21.28. That's a slight earnings guidance disappointment. The company forecast revenue for the third quarter between $2.61 billion and $2.84 billion, where the consensus estimate was for $2.8 billion. That's a neutral revenue guidance report.


Priceline also reported that second quarter bookings rose 34% to $13.5 billion, topping Priceline's own projection for a 32% gain.

The headline from 247WallStreet.com was "Priceline Disappointing Forecast May Offer a Chance to Buy the Dip," and the story contains this line, "The revenue miss and the weaker-than-expected forecast will weigh down Priceline's shares today." That's a bold assertion, given the earnings win and excellent bookings numbers; bold and wrong , as it happens. PCLN stock has been up between 2.5% and 4% since within seconds of the opening bell.

MarketWatch.com went one better, stating "Priceline shares fall after downbeat earnings report," in a story published more than three hours before the market even opened. No one need point out to me that they were talking about pre-market trading -the article says as much-but note how they used the fact that the stock was lower in pre-market trading as the guide to strength of the earnings report, which was not, in any way downbeat. That's doing it very, very wrong. In this case, pre-market traders also wildly misjudged the market's reaction to the report.

It's not all bad news for the industry. Bloomberg managed to get the story right, publishing (within three minutes of the MarketWatch.com story) "Priceline Earnings Exceed Estimates on International Bookings." The fact that Bloomberg reported that the news was good when the pre-market was saying it was bad means not so much that they were right while the others were wrong, but that they were providing actual analysis, while the others were basing their errors on the errors of others: the blind leading the blind.

Priceline is a gigantic, highly complex corporate entity and I don't follow it closely enough to know which of the many numbers it reported on today are the numbers that traders are particularly focused on. My question is, was that so hard to admit? The blind men of the media need to be a bit more cautious when sizing up the elephants of the world, lest they, and those who rely on them, end up getting stepped on.

Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC .


This article was originally published on MarketIntelligeneCenter.com



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Earnings

Referenced Stocks: PCLN

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