Priceline Reports First Profit, Beats Estimates

Who says you can’t make money on the Internet?

Priceline.com Inc., the beleaguered Internet retailer, reported its first profit Tuesday amid rising hopes among investors.

The name-your-own-price vendor of airline tickets, hotel rooms and other services said second-quarter net income reached $11.7 million, or 5 cents a share, on a pro forma basis, meaning the company excluded certain expenses.

The figure was well above the expectations of analysts, who had been projecting a profit of about 1 cent a share. Even with the charges included, Priceline managed to eke out a second-quarter profit of $2.8 million, or 1 cent a share.

At the same time, Priceline saw second-quarter revenue increase to $364.8 million--up 3.6% from the $352.1 million recorded in the same period last year.

The numbers backed up Priceline’s claims that it would reach profitability after a tumultuous year of heavy losses and tumbling stock prices. During that time, the Connecticut-based company laid off hundreds of workers and closed its WebHouse Club service for selling gasoline and groceries in a race to get the red ink off its books.

Investors reacted favorably to the earnings report Tuesday, bidding up Priceline’s stock price by more than $1 a share, or more than 10%, in after-hours trading. The stock has been rebounding from an all-time low of $1.06 on Dec. 27.

“We are pleased that our airline ticket sales have substantially recovered, despite the difficult airline travel market and competition from heavy discounting by the major carriers,” said Jeffery H. Boyd, Priceline’s president.

“It is also encouraging to see the continued rapid growth of our hotel and rental car products, which we believe have a substantial inventory advantage over the competition and broad consumer appeal,” he said.