Priceline Group Inc (NASDAQ:PCLN) today reported its 2nd quarter 2015 financial results. Second quarter gross travel bookings for The Priceline Group (the “Group”), which refers to the total dollar value, generally inclusive of all taxes and fees, of all travel services purchased by its customers, were $15.0 billion, an increase of 11% over a year ago (approximately 26% on a constant currency basis).
The Group’s gross profit for the 2nd quarter was $2.1 billion, an 11% increase from the prior year (approximately 26% on a constant currency basis). International operations contributed gross profit in the 2nd quarter of $1.8 billion, an 8% increase versus a year ago (approximately 26% on a constant currency basis). The Group had GAAP net income applicable to common shareholders for the 2nd quarter of $517 million, or $9.94 per diluted share, which compares to $576 million or $10.89 per diluted share, in the same period a year ago.
Non-GAAP net income in the 2nd quarter was $653 million, a 2% decrease versus the prior year. Non-GAAP net income was $12.45 per diluted share, compared to $12.51 per diluted share a year ago. FactSet consensus for the 2 nd quarter 2015 was $11.85 per diluted share. Adjusted EBITDA for the 2nd quarter 2015 was $805 million, a decrease of 1% versus a year ago. The section below entitled “Non-GAAP Financial Measures” provides definitions and information about the use of non-GAAP financial measures in this press release, and the attached financial and statistical supplement reconciles non-GAAP financial information with the Group’s financial results under GAAP.
“The Priceline Group performed well in the quarter as the summer travel season got off to a strong start with a second consecutive quarter of accelerating growth in hotel room nights and rental car days booked,” said Darren Huston, President and CEO of The Priceline Group. “Globally, our accommodation business booked 113 million room nights in the second quarter, up 26% over the same period last year. International gross bookings growth accelerated to 30% on a constant currency basis and the Group’s total gross profit grew by about 26% on a constant currency basis.”
Looking forward to the third quarter, Mr. Huston said, “We believe we are well set up to deliver the largest quarter in our company’s history. Our teams are ready and are intensely focused on delivering the best selection, competitive pricing, and the best online and offline experience to our customers around the world.”
The Priceline Group said it was targeting the following for 3rd quarter 2015:
- Total gross travel bookings ranging from a decrease of 1% to an increase of approximately 6% year-overyear (an increase of approximately 13% – 20% on a constant currency basis).
- Year-over-year increase in international gross travel bookings of approximately 0% – 7% (an increase of approximately 16% – 23% on a constant currency basis).
- U.S. gross travel bookings are expected to be about the same as 3rd quarter 2014.
- Year-over-year increase in revenue of approximately 1% – 8%. • Year-over-year increase in gross profit of approximately 3% – 10% (an increase of approximately 19% – 26% on a constant currency basis).
- Adjusted EBITDA of approximately $1,425 million to $1,525 million. • Non-GAAP net income per diluted share between $22.95 and $24.45.
- excludes non-cash amortization expense of intangibles.
- excludes non-cash stock-based employee compensation expense.
- excludes non-cash interest expense related to the amortization of debt discount and gains or losses on early debt extinguishment, if any, related to cash-settled convertible debt.
- excludes the impact, if any, of significant charges or benefits associated with judgments, rulings and/or settlements related to travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings.
- excludes the impact, if any, of significant costs related to acquisitions.
- excludes non-cash income tax expense and reflects the impact on income taxes of certain of the nonGAAP adjustments, and
- includes the dilutive impact of unvested restricted stock units and performance share units because nonGAAP net income has been adjusted to exclude stock-based employee compensation.
The Priceline Group highlighted that its forecast assumes currency exchange rates of $1.09 per Euro and $1.56 per British Pound for the remainder of the quarter, which results in average exchange rates for the quarter that would be 18% weaker for the Euro and 7% weaker for the British Pound as compared to the prior year. Therefore, currency exchange rates are expected to significantly reduce the Company’s growth rates expressed in U.S. dollars.
In addition to the adjustments above, adjusted EBITDA excludes depreciation and amortization expense, interest income, interest expense and income taxes and includes the impact of foreign currency transactions and other expenses.
When aggregated, the non-GAAP adjustments are expected to increase adjusted EBITDA over GAAP net income by approximately $382 million in the 3rd quarter 2015. In addition, the non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $118 million in the 3rd quarter 2015. The Group estimates GAAP net income per diluted share between $20.84 and $22.34 for the 3rd quarter 2015. (Original Source)
Shares of Priceline.com closed yesterday at $1283.99. PCLN has a 1-year high of $1329.90 and a 1-year low of $990.69. The stock’s 50-day moving average is $1180.15 and its 200-day moving average is $1170.64.
On the ratings front, Priceline.com has been the subject of a number of recent research reports. In a report issued on August 3, Cantor Fitzgerald analyst Naved Khan reiterated a Buy rating on PCLN, with a price target of $1360, which represents a potential upside of 5.9% from where the stock is currently trading. Separately, on July 31, Deutsche Bank’s Ross Sandler reiterated a Hold rating on the stock and has a price target of $1307.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Naved Khan and Ross Sandler have a total average return of 27.0% and 9.7% respectively. Khan has a success rate of 86.0% and is ranked #78 out of 3724 analysts, while Sandler has a success rate of 56.6% and is ranked #380.
Overall, 2 research analysts have assigned a Hold rating and 6 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $1350.83 which is 5.2% above where the stock closed yesterday.
Priceline Group Inc is a provider of online travel and travel related reservation and search services. The Company offer consumers accommodation reservations through its Booking.com, priceline.com and agoda.com brands.