A pair of online travel agencies, priceline (PCLN - Get Report) and Orbitz (ORBZ), announced fourth-quarter earnings that topped Wall Street estimates and showed much improvement from last year's results.
Priceline reported net income of $2.2 million, or 6 cents a share, topping the 4 cents expected by Wall Street and the net loss of $7.4 million, or 20 cents, it had a year ago. Net revenue, which excludes all fees and taxes as well as "Name Your Own Price" sales, came in at $180.2 million, down 8.7% from a year ago.
Gross travel bookings, which includes taxes and fees as well as the purchase price of travel, including those "Name Your Own Price" sales, came in at $256.2 million, a 12.2% increase from last year. Gross profit came in at $31.8 million, up 4.4% from last year, while gross margin rose to 17.7% from the year-ago 15.5%."The growth in total gross travel bookings and gross profit reflects a successful transition of our airline ticket business and a positive bottom-line financial result, before any new benefit from new airline ticket advertising," said Jeffery Boyd, priceline's CEO. Indeed, priceline's move beyond airfare reaped some benefit in the fourth quarter. The company said that bookings of hotel rooms rose 37% year over year, while car rental sales rose 62%. That said, airfare sales continued their decline, dropping 18% year over year, which is an improvement from the drop of 40% seen in the first nine months of fiscal 2003. Going forward, priceline said it was hopeful that the new pairing of William Shatner and Leonard Nimoy as company pitchmen would boost sales and reverse the slide in airfare sales. In the first quarter, the company said that earnings would come in between 6 cents and 10 cents a share, toward the high end of the 7-cent profit currently expected by Wall Street.