Priceline.com Exceeds Forecasts; Shares Rise
Priceline.com Inc. on Thursday reported better-than-expected operating profit for the third quarter and raised its forecast for the fourth quarter, sending its shares up in after-hours trading.
The Internet travel agency earned $6.29 million, or 3 cents a share, in the third quarter, compared with a loss of $2.22 million, or 1 cent, a year ago, excluding one-time items in both periods.
The company said it benefited from cost-cutting amid a decline in bookings. Sales fell 12% to $302 million.
The results exceeded analysts’ consensus estimate of 1 cent a share in profit, according to Thomson Financial/First Call.
Priceline.com reduced expenses by shuffling executives, firing 34% of its staff and shelving expansion plans. The revamping, designed to lower annual costs by $70 million, followed a string of complaints and publicity about customer service and the closing of an affiliated company.
Chief Executive Richard Braddock said the company is now in a solid position and predicted the current environment of low airline fares will change in coming months, helping Priceline.com.
Including charges for restructuring and supplier warrants and stock-based pay costs, the company had a loss of $3.59 million, or 2 cents a share, in the quarter, compared with a loss of $199.1 million, or $1.19, a year ago.
For the fourth quarter, Price-line.com said it expects sales of $215 million to $235 million and break-even earnings. Analysts had forecast revenue of $180 million and a loss of 1 cent, excluding noncash items.
Shares of the Norwalk, Conn.-based company rose to $4.80 in after-hours trading after falling 41 cents to $4.40 in regular Nasdaq trading. The stock has dropped more than 97% from a high of $165 in April 1999, wiping out more than $22 billion of market value.
The company released results after the close of regular U.S. trading.
Braddock said that before Sept. 11, Priceline.com had expected to surpass revenue forecasts of $341 million. Bookings fell 39% in the week after the attacks. He said sales are continuing to recover.
Other technology sector earnings, excluding one-time items unless noted:
* Alltel Corp. reported an 8% increase in operating earnings to $230.7 million, or 74 cents a share, helped by an increase in new customers and wireless revenue. The telecommmunication company’s results missed analyst expectations by a penny. Revenue grew 2% to $1.9 billion, with sales in its wireless business up 4%.
* Computer Sciences Corp. said fiscal second-quarter profit fell 37% to $68.2 million, or 40 cents a share, hurt by a weakening economy and lower demand for its services after the Sept. 11 terrorist attacks. The results exceeded analyst expectations by 3 cents. The El Segundo-based computer services company said sales rose 11% to $2.77 billion.
CSC also forecast lower third-quarter sales and profit because of lagging demand. The company now expects earnings in the high 40 cents to low 50 cents. Analysts on average forecast 52 cents, according to Thomson Financial/First Call.
* Williams Communications Group Inc. said its third-quarter loss widened to $268.3 million, or 55 cents a share, from $149.9 million, or 32 cents, in the year-earlier quarter, as expenses rose. The results matched analyst forecasts. Sales rose 42% to $297.8 million
