Name-your-own price online travel agent
met Wall Street's forecasts for the second quarter, but said the airline business continues to be a drag and warned that earnings will fall short in the third quarter.
At the same time the company shuffled management and announced a share buyback aimed at shoring up the company's stock, which has sunk more than 60% this year.
It seemed to be working, at least initially, as the stock was rallying in after hours trading. The stock closed Wednesday up a penny at $1.85, but lately traded at $2.22 on Island.
In the second quarter, priceline reported net income of $6.3 million, or 3 cents a share, on revenue of $304.5 million. Analysts had been projecting earnings of 3 cents and revenue of $307 million, according to Thomson Financial/First Call. Still, on both scores the company did worse than the year-ago period, when it earned 5 cents a share on revenue of $364.8 million.
The company projected earnings of breakeven to 2 cents a share in the third quarter, lower than the current consensus of 3 cents. In a statement priceline said "the travel industry, particularly the airline business, continues to face significant challenges" and said it is having difficulty making revenue projections.
"As for the third quarter 2002, it is particularly challenging to provide definitive revenue guidance given the continued turbulence in the airline industry and the potential one-time impact of consumer reluctance to travel in September around the anniversary of the terrorist attacks," the company said.
Wednesday's comments sounded very much like the tune the company has been singing in recent quarters, during which it has mostly met earnings estimates despite revenue shortfalls.
Meanwhile, the company appointed Jeffery Boyd, its former president and chief operating officer, as co-CEO. He will share the CEO responsibilities with Chairman Richard Braddock. The company also named Mitch Truwit, former executive vice president, as the new COO.
The company's board approved a plan to buy up to $40 million of priceline stock. "At the current valuation, we believe that the best investment priceline.com can make is in our own company," Braddock said in a statement.
priceline, based in Norwalk, Conn., once seemed headed for extinction, like many dot-coms that ran out of money. But the company, through aggressive cost-cutting that trimmed about $70 million annually from its budget, reversed its fortunes and turned a profit for the first time last July.