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


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Priceline.com Inc. ( PCLN ) is set to report second-quarter 2014 results on Aug 11. Last quarter, the company posted a 13.3% positive surprise. Let's see how things are shaping up for this announcement.

Factors to Consider this Quarter

Priceline's first-quarter earnings beat the Zacks Consensus Estimate by 83 cents or 13.3%, driven by strong growth in the online travel industry. Revenues of $1.64 billion were up sequentially as well as on a year-over-year basis, attributable to share gains in both domestic and international markets. Kayak remained a major contributor. Also, overall bookings increased 34.4% sequentially and 34.2% year over year, reflecting improving demand environment.

Margins were, however, affected in the quarter due to an unfavorable mix.

For the second quarter, Priceline expects revenues to increase 19-29% year over year, and pro-forma earnings per share within $11.22-$12.02. The Zacks Consensus Estimate for the quarter is pegged at $11.33.

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 $11.33. 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:

Cooper Tire & Rubber Co. ( CTB ), with an Earnings ESP of +1.69% and a Zacks Rank #1 (Strong Buy).

Myriad Genetics Inc. ( MYGN ), with an Earnings ESP of +4.35% and a Zacks Rank #1.

Callon Petroleum Company ( CPE ), with an Earnings ESP of +5.88% and a Zacks Rank #1.

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PRICELINE.COM (PCLN): Free Stock Analysis Report

MYRIAD GENETICS (MYGN): Free Stock Analysis Report

COOPER TIRE (CTB): Free Stock Analysis Report

CALLON PETE-DEL (CPE): 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 Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
More Headlines for: PCLN , MYGN , CTB , CPE

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