Will Priceline.com (PCLN) Disappoint this Earnings? - Analyst Blog


Priceline.com Inc. ( PCLN ) is set to report first-quarter 2014 results on May 8. Last quarter, the company posted 5.0% positive surprise. Let's see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Priceline's fourth-quarter earnings exceeded the Zacks Consensus Estimate by 42 cents or 5.5%, driven by strong growth in the online travel industry. Revenues of $1.54 billion were down sequentially but up on a year-over-year basis, attributable to share gains in both domestic and international markets. Also, overall bookings were up 38.8% year over year, reflecting improving demand environment.

Margins were, however, affected in the quarter due to lower volumes.

For the first quarter, Priceline expects revenues to increase 15-25% year over year, and pro-forma earnings per share within $6.35-$6.85. The Zacks Consensus Estimate for the quarter is pegged at $6.26.

Earnings Whispers?

Our proven model does not conclusively show that Priceline.com will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP:   Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $6.26. Hence, the difference is 0.00%.

Zacks Rank: Priceline has a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

You could consider other stocks with a positive Earnings ESP and Zacks Rank #1, 2 or 3 such as:

Advanced Energy Industries, Inc. ( AEIS ), with Earnings ESP of +10.00% and a Zacks Rank #1 (Strong Buy).

Vulcan Materials Company ( VMC ), with Earnings ESP of +5.88% and a Zacks Rank #1.

Unit Corporation ( UNT ), with Earnings ESP of +2.70% and a Zacks Rank #1.

ADV ENERGY INDS (AEIS): Free Stock Analysis Report

PRICELINE.COM (PCLN): Free Stock Analysis Report

UNIT CORP (UNT): Free Stock Analysis Report

VULCAN MATLS CO (VMC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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 , Business , Earnings , Stocks

Referenced Stocks: AEIS , PCLN , UNT , VMC



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