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Online travel company $PCLN has appointed David Goulden as EVP and CFO, effective March 1, 2018. Most recently, Goulden served Dell Technologies as President of its Infrastructure Solutions Group. Goulden, who succeeds Daniel Finnegan, will report to Priceline CEO Glenn Fogel. Earlier in his career, Goulden had served EMC Corp. for about 14 years.
$PCLN said it is in the process of hiring employees to expand its IT division, under the Booking.com umbrella, to ensure improved customer experience. Claiming that the market share and profitability of its Kayak division is very high, the company said it is encouraged by the prospects of bringing together Kayak and travel search portal Momondo.
$PCLN said its business was largely unaffected by the recent hurricanes in US. The company sees a marked increase in its spending on digital marketing in the coming quarters, especially in the Asian market. On its recent investment in Chinese e-commerce firm Meituan, the company said competitive pricing is the key to expand business in that market.
$PCLN attributed its strong 3Q17 performance and positive outlook to investments in the business and brand-advertising strategies. Going forward, the company expects continued advertising spending to put pressure on margins. As part of revamping its products, Priceline is also investing in new technologies and platforms, including machine learning.
$PCLN said it expects to record GAAP profit of $625-$655MM, or $12.6 per share to $13.2 per share, in 4Q17. The company is looking for non-GAAP earnings per share between $13.4 and $14.0 for the quarter. Room Nights Booked is estimated to grow in the range of 8-13% YoY in fourth quarter, and gross travel bookings in the range of 9.5% to 14.5%.
Buoyed by a sharp rise in overall bookings, on the back of robust international operations, $PCLN’s 3Q17 revenue jumped 20% to $4.4Bil. Earnings of the online travel agency, which seeks to expand presence in China, surged to $1.7Bil or $34.43 per share, exceeding expectations. The total value of bookings was $22Bil, up 18% compared to last year.
$PCLN is currently investing in IT talent, supplier acquisition and advertising. The company expects its advertising expenses to grow more than gross profit, resulting in margin pressure in 4Q17. Pricing pressure continues to be an issue that needs to be addressed. In the near term, China will be Priceline’s focus region for developing business.
$PCLN said it expects to register an 11-16% growth in accommodation business in 3Q17. Gross travel booking growth is expected to range between 11% and 16%. The company sees GAAP earnings in the range of $31.7 to $33.4 per share for the quarter, and non-GAAP earnings in the $32.4-$34.1 per share range.
Online travel portal $PCLN reported a 24% increase in 2Q17 earnings, on the back of strong bookings and robust accommodation business. Earnings rose to $14.39 per share, exceeding estimates. On a non-GAAP basis, earnings advanced 20% to $15.14 per share. Revenues grew 18% to $3Bil, helped by strong performance by the Agency and Merchant divisions.
A 16% growth in travel bookings lifted $PCLN’s 2Q17 revenues to $3Bil as favorable market conditions continued to support operations across all segments. The strong performance was boosted by a 21% gain in the accommodation business and 12% rise in car rental operations, which were partially offset by an 8.7% drop in airline ticket bookings.
$PCLN believes it will not face any significant impact from any form of travel restrictions as it is a global company. $PCLN has not seen any material impact from political events in the US. The broad macro environment is strong but the current trend for 2Q17 is a bit clouded due to the shift in timing of Easter.
$PCLN sees opportunities to invest in brand advertising which would be beneficial in the long-term. There are Opex investments which have paid off. The company will try to make smart investments for the future and manage expenses closely. $PCLN believes it will be able to make the necessary investments without margin pressures.
$PCLN said its approach to 2Q17 guidance has not changed. There is volatility in the early part of the quarter because of the shift of Easter which causes some difficulty. The market remains healthy and occupancy and ADRs remain strong. The seasonal impact has negatively impacted growth for 2Q17. $PCLN expects more ROI pressure in 2Q17.