Priceline Group said profit climbed in the final quarter of 2015, fueled by double-digit growth in hotel bookings.
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After easily topping fourth-quarter expectations, the company issued upbeat revenue guidance for the first quarter and said it expects another period of solid bookings growth. Shares soared 14% to $1,270 in premarket trading, a move that would nearly erase the stock’s year-to-date loss if the stock were to open at that level.
Priceline, based in Norwalk, Conn., has historically relied on booking commissions for growth. As the company generates most of its revenue from international bookings, the rising U.S. dollar has hurt results.
The company, which also operates Booking.com and Kayak.com, had cautioned that sales would slow in the fourth quarter, to a rate of 1% to 8%. Wednesday, Priceline said revenue increased 8.7% to $2 billion, above the average analyst forecast of $1.96 billion on Thomson Reuters.
In all for the December period, Priceline reported a profit of $504.3 million, or $10 a share, up from $451.8 million, or $8.56 a share, a year earlier. Excluding certain items, earnings per share rose to $12.62 from $10.85, surpassing the average analyst estimate of $11.80 on Thomson Reuters.
Priceline said international gross bookings jumped 16% from a year earlier despite the impact of the dollar, which makes it more expensive for foreign travelers to come to the U.S. That increase helped offset a 7.6% decline in domestic bookings and resulted in overall bookings that rose 13% in the December quarter from a year earlier.
Chief Executive Darren Huston said Wednesday that momentum in Priceline’s brands has continued into the first quarter. The company expects revenue in the current period to rise 9% to 16%, before adjusting for currencies, a forecast that translates to $2.01 billion to $2.14 billion in sales. Analysts, according to Thomson Reuters, have projected $2.07 billion.
Priceline guided for a 12% to 19% increase in total bookings, or 18% to 25% when foreign exchange effects are stripped out.
Smaller rival Expedia similarly cited “huge headwinds from foreign currencies” as one factor behind its weaker-than-expected fourth-quarter report, though Expedia and fellow rival TripAdvisor recently signaled improving travel trends.
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