Updated from 7:10 a.m. EST
revenue took off and beat analysts' bids for its fourth-quarter earnings Thursday while saying it would more than double its annual revenues in 2000.
, proved to be an enterprising endorser for priceline.com as they added a third more customers for the three-month period.
priceline.com, the online auctioneer of airfares and groceries, reported a loss of 6 cents, up 57% from a loss of 14 cents in the same quarter of 1998. Analysts polled by
First Call/Thomson Financial
had been looking for a loss of 8 cents for the quarter.
Priceline: Join the discussion on our
The net loss for the quarter was $10 million compared with a loss of $12.7 million in the year-earlier quarter.
Revenues for the Norwalk, Conn.-based company reached $169.2 million for the fourth quarter, up 791% from $19 million in 1998.
Though the company's results were positive, many investors were not impressed. Shares of Priceline.com were down 1 1/2, or 2%, to 64 3/4 by midafternoon Thursday.
Lauren Levitan, an analyst at
, was confused by the market's reaction throughout the day. "I don't know; it's buy on mystery and sell on history," said Levitan, who rates the stock a strong buy. Robertson Stephens was recently an underwriter for a priceline.com stock offering. "The earnings were encouraging and indicative of the kinds of opportunities in front of them."
After the company's conference call with analysts, Levitan raised her estimates for 2000 revenues to $975 million from $900 million and adjusted her expectations for earnings losses up 2 cents. "We're a buyer at these levels," she said.
"priceline.com had a strong year and a particularly strong fourth quarter as we continued to deliver on our commitment to steadily reduce our operating losses and improve our operating margins on our way to profitability," said Richard Braddock, priceline.com's chairman and chief executive officer.
The name-your-own-price company addded almost 1 million new bidders, bringing its total number of customers to nearly 4 million.
Timothy Fogarty, analyst at
, was pleasantly surprised by the earnings. "They came in even better than their pre-released numbers," said Fogarty, who rates the stock a strong buy and has done no underwriting for the company. "On Jan. 5, they said gross profit would be $22 million, which translates into 13.5% gross margins." priceline.com exceeded that guidance, reporting $24.1 million in gross profit with 14.2% gross margins.
Braddock seized on the momentum and announced that priceline.com would increase revenues by more than 30% over the next three months. "More importantly, we have established a target of $1 billion of revenue for the year 2000, which is more than double our revenue in 1999."
The stock has been under pressure because of the upcoming lockup expiration on Feb. 7, where insiders can sell back their shares to the public. Fogarty thinks Braddock and vice chairman Jay Walker are not looking to dump their holdings. "They believe in the model," Fogarty said.