Name-your-price e-tailer Priceline.com (Nasdaq: PCLN) said Tuesday that sales of airline tickets and other travel products are recovering from the events of September 11th faster than previously thought, and revenue for the quarter just ended will not suffer as much as executives initially expected.
Priceline also said it plans to buy a majority stake in the equity of Priceline.com Europe, which sells travel products in the UK and holds the rights to develop the Priceline business in Europe.
Results from the European business will be included in Priceline's fourth-quarter results, reducing pro forma earnings by about a penny per share "for the next several quarters," Priceline said after the close of trading Tuesday.
At the same time, Priceline said it now expects revenue for the third quarter ended September 30th to be "at the high end" of the US$280 million to $300 million range set forth a week after the attacks.
On September 18th, the company lowered its revenue estimate for the quarter, saying the terrorist attacks on the United States resulted in a "significant decrease" in bookings.
Sales Rebound
Tuesday, Priceline said that what it calls "unique offers" -- offers to purchase one or more travel products -- in the week ended October 1st had rebounded to 94 percent of pre-attack levels, and "units sold" -- a unit being one airline ticket, one night in a hotel or one day's car rental -- were 82 percent what they were in the week preceding the attacks.
Priceline said the recovery in travel product sales surpassed that of unit sales because of refunds; discounts offered by airlines, hotels and car renters that were cutting prices to spur demand in the wake of the attacks; and reductions in the number of flights offered as airlines changed their schedules.
Almost Recovered
"We are pleased by the speed and progress of our ongoing recovery," Priceline chairman and chief executive officer Richard S. Braddock said. "Our strong customer franchise, and attractive inventory and pricing, position us well to serve customer travel needs during this transitional period."
Priceline shares rose 64 cents, or 17.4 percent, to $4.31 in morning trading Wednesday. Goldman Sachs analyst Anthony Noto repeated a market outperform rating on the stock.
Hotel Hope
Like other travel stocks, Priceline shares have been taking a beating in the days since the attacks, as investors fretted about the economy and consumers' willingness to travel. The stock is down from a 52-week high of $12.06.
Braddock pointed to Priceline's hotel business as a focus of its rebound, saying that a
number of factors "combined with strong underlying
momentum to drive a nearly full recovery in three weeks."
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