Priceline.com (PCLN) reported strong fourth-quarter results that showed continued momentum with respect to bookings growth. Though we will be revisiting our valuation on the online travel provider, we don’t expect to make a material change to it.
The company’s revenue advanced 35.5% during the period, as international operations increased nearly 63% from last year’s quarter. During the period, fourth-quarter gross travel bookings, increased nearly 52%. Gross profit performed even better than firmwide top-line expansion, jumping over 50% in the quarter. Further, Priceline.com was able to leverage its cost structure such that operating income expansion exceeded both revenue and gross profit increases at a nearly 61% jump. The firm’s GAAP net income for the fourth quarter came in at $4.41 per share, up nearly 66% from the same period a year ago. Non-GAAP net income advanced over 58%, to $5.37 per share, which compares to consensus estimates of $5.05 per share.
Looking forward, Priceline.com indicated that it expects year-over-year total gross travel bookings to increase nearly 38% in the first quarter of 2012 led by international bookings growth of 46% at the high end of its provided guidance range (domestic gross travel bookings are only supposed to advance 10%, however). During the first quarter of 2012, revenue is expected to jump as much as 27%, with gross profit advancing over 40%. Management expects non-GAAP net income as high as $3.90 per share in the period.
Though we were pleased with Priceline.com’s quarter and outlook, the firm’s shares are getting expensive. We remain on the sidelines.