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Priceline Earnings: What Wall Street's Saying (Update 1)

Updated from 8:56 a.m. EST to provide comments from UBS analyst.

NEW YORK (TheStreet) -- Priceline.com (PCLN) posted first-quarter results that beat expectations, but said second-quarter earnings would be sharply below estimates.

For the second-quarter of 2013, Priceline said it's expecting a year-over-year increase in total gross travel bookings of approximately 30% to 37%, with international gross travel bookings rising approximately 36% to 43%. It expects adjusted EBITDA to be between $560 million and $595 million, with non-GAAP earnings between $8.87 and $9.45 a share. Wall Street analysts are expecting $9.58 a share.

The Norwalk, Conn.-based firm posted earnings of $5.76 a share on $1.3 billion in revenue in its first quarter. Analysts polled by Thomson Reuters were looking for $5.27 a share on $1.275 billion in revenue.

Here's what Wall Street analysts are saying this morning.

JPMorgan analyst Doug Anmuth (Overweight, $830 PT):

"Priceline reported solid 1Q results ahead of expectations driven by good growth in Europe from Booking.com and higher growth rates at Agoda and Rentalcars.com. Int'l bookings growth of 43% ex-FX came in higher than our 41% but was at the lower end of the mid-40's% that we believe the Street was looking for. Priceline guided for 33%-40% ex-FX growth in 2Q partly due to Easter in 1Q, but we believe it may be viewed as conservative given the easier overall 2Q comp."

Credit Suisse analyst Stephen Ju (Outperform, $924 PT):

"We note that despite the higher than expected advertising expenses of over $25m, gross profit and PF operating profit dollars exceeded our estimate by $39 and $34m, respectively. And given the longer-term global expansion opportunity in front of the company, investors should not begrudge the decisions made by a management team that is investing against a strategic imperative while at the same time returning value to shareholders with growth in operating profit dollars of 32%. Instead, PCLN should be awarded a higher multiple."

Jefferies analyst Brian Pitz (Buy, $860 PT):

"Priceline reported a Beat quarter with solid performance across the board. All key geographies performed well (including Europe). Growth in hotel room nights was consistent with unit growth in Q4 while rental car days growth accelerated. We are increasing slightly our ests and setting a new PT of $860."

Deutsche Bank analyst Ross Sandle (Hold, $715 PT):

"Priceline reported billings, gross profit and EBITDA slightly above the high end of its guidance ranges, but forecasted 2Q below consensus. Both PCLN and EXPE continue to face de-leverage in their business models from: 1) inflationary pressure in customer acquisition, 2) mix shift to lower margin regions, and 3) mix shift to paid channels vs. organic. We continue to view PCLN's valuation as compelling, but decelerating growth and margin compression in 2Q13 keep us on the sidelines for now."

Cantor Fitzgerald analyst Naved Khan (Buy, $800 PT):

"With no sequential slowdown in either bookings or room night growth, Priceline is benefiting from stability in its core European market and continues to gain share in global hotel bookings. While management's 2Q outlook is somewhat light, we do not view it as a reason to be concerned given that it reflects a cautious view in a risky macro environment, an Easter holiday shift and higher ad spending to drive growth."

UBS analyst Eric J. Sheridan (Buy, $860 PT):

"Our new PT is $860 (prior: $825) based on a blended valuation approach across EV/Sales, EV/ EBITDA and EV/FCF. Our upside scenario is $1,045 (prior: $1,010), while our downside scenario is $680 (prior: $660). The changes to our PT and upside/downside are driven primarily by an improved gross bookings outlook & slightly higher multiples as OTAs drive growth in a reasonable manner."

Shares of Priceline were soaring in Friday trading, up 3.8% to $765.50.

--Written by Chris Ciaccia in New York

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