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Priceline.com Pleases The Street

By Andy Wang
May 5, 1999 12:00 AM PT

Name-your-price online retailer Priceline.com (Nasdaq: PCLN) impressed Wall Street on Wednesday when it released its first earnings report since becoming a public company. The company lost $17.2 million -- or 12 cents a share -- in the first quarter of 1999, but analysts had expected a loss of 13 cents a share. The first-quarter loss was a 77 percent decrease from the net loss of $73.7 million for the fourth quarter of 1998. Meanwhile, revenue increased 160 percent in that same time period, growing to $49.4 million (US$) from $19 million.

Priceline.com Pleases The Street

Priceline.com also reported that it added approximately 531,000 new customers in the first quarter, an 86 percent increase over the fourth quarter. In addition, the company received about 940,000 offers from customers for products and services in the first quarter, a 98 percent increase from the fourth quarter. Repeat customers accounted for 43 percent of the offers.

In the first quarter, Priceline.com sold approximately 186,000 leisure airline tickets, a 170 percent increase over the approximately 69,000 tickets sold in the fourth quarter of 1998. By comparison, in the last nine months of 1998, 134,900 tickets were sold.

"The company has created significant momentum in attracting and satisfying customers and building our brand," said Rick Braddock, chairman and CEO of Priceline.com. "And the capital raised in our initial public offering enables us to invest aggressively in building our business, growing our customer base and enhancing our products and service offerings."

Eyes on Expansion

Priceline.com is best known for its travel-related services, but it also has launched a name-your-price service for home mortgages and automobile loans. The company is now looking toward further expansion. On Wednesday, Braddock told CNBC that he expects Priceline.com to soon feature "several new offerings in financial services, including a credit-card product.

The company already has signed a marketing deal with credit card issuer First USA that could generate up to $200 million in revenue over five years for Priceline.com.

Stock Impact

Shares of Priceline.com, which went public at $16 on March 29, were up 2-7/8 to 136-7/8 in early trading today as the company continues to challenge Amazon.com (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) in market capitalization.

Priceline.com, which was upgraded from buy to strong by BancBoston Roberston Stephens on Wednesday, is off its all-time high of 165, but the volatile stock is still one of the standout performers in recent weeks. Shares of Priceline.com were trading as low as $58 in April.


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