Q2 Preview: Sector Sentiment Bodes Well for priceline.com (PCLN) Amid Soft Guidance

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Priceline.com (Nasdaq: PCLN) shares are trading higher Tuesday afternoon heading into the travel website's second-quarter 2012 earnings report, expected out after markets close.


The company will host a webcast at 4:30pm EDT. Click here to access the event.

Currently, the Street is looking for priceline.com to report a 34 percent gain in earnings to $7.37 per share on revenue of $1.36 billion. Estimize consensus views peg EPS at $7.36 on revs of $1.356 billion.

Traders might take a gander at priceline peer Expedia's (Nasdaq: EXPE) results for its second quarter , issued at the end of July. Revs rose 14 percent while adjusted net income popped 24 percent. Expedia also saw a 13 percent rise in gross bookings with room night growth up 78 basis points to 22 percent.

One other key point is that Expedia is up 29.4 percent since it's July 26th report, while priceline.com is up just 8.4 percent. Investors might want to keep their eye on something like a 10-for-one stock split or some wording similar to that on the conference call. If priceline.com is missing out on multitudes of upside because its stock is more expensive than Apple or Google shares without the same sentiment behind them, then management is doing something wrong.

Data from Streetinsider's Ratings Insider has 18 analysts with a Buy, one at Neutral, and zero with a Sell rating on priceline.com.

The Street's price target average is $744, ranging from $570 up to $885.

Into the print, Benchmark is modeling EPS of $7.41. The firm thinks priceline.com's guidance (gross bookings up 26 percent to 31 percent, domestic bookings up 5 percent to 10 percent, and proforma EBITDA of $450 million to $470 million) should be conservative. Benchmark said domestic bookings guidance includes a 5 percent increased in ADRs, implying limited volume growth. The firm also commented, "[w]e're also not convinced that the accelerating hotel room-night growth, which carried into 2Q, dropped off as precipitously over the balance of the quarter. We're forecasting gross bookings may grow 32% y/y, including international gross bookings growth of 38% and domestic bookings growth of 10%."

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out priceline.com's past performance at Streetinsider's priceline.com's Income Statement .



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 , Stocks

Referenced Stocks: EXPE , PCLN

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