Updated from 6:11 p.m. EDT

Shares of



TST Recommends

were rising Tuesday after the company boosted second-quarter earnings estimates on strong booking momentum, particularly in airline ticket sales.

The online travel retailer said after the bell Monday that it now expects to post pro forma earnings of 29 cents to 32 cents a share, up from its prior estimate of 25 cents to 30 cents a share.

A Thomson First Call survey of analysts had produced a consensus estimate of 28 cents a share.

(The company's pro forma earnings exclude amortization expenses associated with acquiring most of Travelweb.com, stock-based compensation expenses and option payroll tax expenses).

"We are pleased with the strong gross bookings momentum we are experiencing this quarter," said Priceline President and Chief Executive Jeffery H. Boyd in a statement. "Our retail choice product in airline tickets has clearly struck a chord with consumers and our other retail products are also performing well, including Travelweb.com. Given our strong results in the quarter, we elected to re-invest in advertising and expect to spend approximately $15.5 million to $16 million in the second quarter."

The company had previously expected to spend $14 million to $15 million on advertising in the second quarter.

Priceline's shares were recently up $1.20, or 4.3%, to $29.20.

The company said several of its operating metrics also were being raised: Gross bookings are now expected to rise 55% to 57% from the previous view of 44% to 50%; revenue is expected to grow 6% to 9% from the prior expectation of 5% growth.

In addition, Priceline now expects airline ticket bookings will grow 58% to 60%, compared with previous guidance of 42% to 50%.

The company also said it plans to offer $75 million of convertible senior notes in a private placement, granting the initial purchaser an option to buy up to $10 million of additional notes. Priceline plans to use the proceeds for general corporate purposes, strategic purposes and working capital requirements.