The Priceline (NASDAQ:
) Negotiator has come back from the dead as William Shatner is
returning to the travel discount commercials, according to
The Los Angeles Times
Perhaps this announcement caused the surge in Priceline shares
during Wednesday trading since 94 percent of the company's
customers submitted feedback saying they wanted the 80-year old
actor to return.
In the news lately, Priceline was offering abnormally
conservative third quarter guidance despite being a favorite pick
by firms such as Bank of America, which downgraded the company from
Buy to Neutral on August 8. The downgrade was a result of the
company's outlook, which is considered an indicator of the online
travel agency's health. Booking activity was expected to
deteriorate through the first half of 2012.
Priceline reported second quarter earnings on August 7 and
despite a beat on EPS estimates ($7.85 vs. $7.37 estimates) and a
slight miss on revenues ($1.33 billion vs. $1.35 billion
estimates), the company's third quarter guidance was reported way
below analyst estimates at $11.10-$12.10/share vs. $12.79
After the earnings report, Priceline shares fell to new lows and
eventually hit below $600 a share and have yet to recover. This is
in contrast to a company that has beaten the midpoint of bookings
since its first quarter in 2009 by an average of seven percent.
Analysts at Piper Jaffray concluded that the company's third
quarter guidance was conservative due to, "[international] bookings
growth is being more significantly impacted by macro slowness vs.
what we had expected after aggregating industry and competitive
company data points throughout Q2."
Where will shares go from here? The stock reached its high point
Wednesday at $574.79 and has since slumped to just above $570. Once
William Shatner returns to commercials, consumers may begin to
remember why Priceline was the leader in online travel bookings and
feel confident in using the service once again, rather than
traveling through competitors like Expedia (NASDAQ:
), Orbitz (NYSE:
), Travelzoo (NASDAQ:
) and Ctrip.com (NASDAQ:
), all of which have been trending upward recently (with the
exception of Orbitz, which traded down seven percent during
Yes, Priceline's second quarter earnings miss was rare, but with
bookings remaining strong and the fearless Negotiator returning to
the screen, the company may being to surge once again. Hopefully
William Shatner doesn't sell off his shares when they bottom this
At the time of this writing, Priceline shares traded up one
percent to $570.42.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
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