Priceline.com Shares Jump On Strong Outlook

NEW YORK (AP) — Shares of Priceline.com Inc. hit a nine-year high Tuesday, rising nearly 20 percent, a day after the online travel booking service posted a strong outlook, saying more customers were using it to book airfare and hotel rooms.

Priceline is picking up market share in the U.S. and Europe, it is expanding profit margins and its bookings gained momentum in the current quarter, said Kaufman Bros. analyst Aaron Kessler in a note to investors Tuesday. He boosted his price target by $40 to $240 and raised his earnings estimate for the fourth quarter by 9 percent to $1.65 per share.

The Norwalk, Conn., company said on Monday it expects net income of $1.52 to $1.62 per share, excluding items, in the current quarter; analysts polled by Thomson Reuters had been forecasting profit of $1.49 per share.

Citi Investment Research analyst Mark Mahaney credits Priceline's booking gains to its very low commission rates for hotels and good value for consumers, a plus during the recession. He raised his earnings estimate for the fourth quarter to $1.62 per share from $1.44 per share.

In midday trading Tuesday, Priceline shares soared $31.48, or 18 percent, to $205.21. They had peaked at $207.92 earlier, the stock's highest price since July 2000.