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NEW YORK - Shares of Priceline were up more than 16% in premarket trading Wednesday after the "Name Your Own Price" travel site announced earnings that blew away analyst expectations.
The travel site - famous for its corny William Shatner ads - reported second quarter earnings Tuesday afternoon of $158 million, or $3.09 per share, compared with the $136.3 million, or $2.65 per share, that analysts were expecting.
Driven by higher travel demand and improving room rates, international travel bookings increased by 59% compared to the year-ago quarter, the company said. Priceline has been building up its presence in the European market through hotel reservations on its Booking.com site.
The company's U.S. travel bookings also rose - to the tune of 20% - thanks mainly to more hotel reservations.
That strong performance comes just three months after Priceline warned investors that an erupting Icelandic volcano and declining euro would eat into its profits for the quarter.
Recent, strong financial results from others in the travel industry overall seem to fly in the face of economic reports that paint a picture of a slowing economic recovery.
On Monday, Moody's Investors Service said it is considering upgrading the credit ratings of online travel company Expedia, thanks to forecasts for growth in the travel industry and Expedia's strong financial results during the recession. Expedia said last week that its second-quarter earnings nearly tripled compared to last year, as consumers revved up their travel spending.
Expedia's stock surged 20% in premarket trading Wednesday as well. Priceline and Expedia appear set to open as the S&P 500's two biggest gainers on Wednesday.
Also last week, hotel company Wyndham Worldwide raised its earnings forecast for its next quarter. The company's quarterly income rose 34% from last year thanks to improved performance from its vacation-home business, gains from exchange rates and lower taxes.
Travel site Orbitz plans to announce its second-quarter results early Thursday.Source: CNN