Priceline Jumps on Strong Quarter

The online travel company posts a first-quarter profit and files a $100 million shelf registration.
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Updated from May 3

Priceline.com

(PCLN)

surged 7% Tuesday morning, a day after it beat expectations for the first quarter and took a majority stake in an affiliated hotel-room booking site.

The operator of the name-your-own price travel Web site also said it was planning to sell up to $100 million worth of stock, in an offering that would also enable major stockholders to unload most of their shares.

Priceline shares rose $1.71 to $26.58.

For the first quarter ended March 31, priceline.com reported net income applicable to common shareholders of $4.3 million, or 11 cents per share, beating the Thomson First Call estimate of 8 cents. The company reported a 21-cent loss per common share one year earlier.

Revenue rose 12% to $224.1 million, up 12% from the year-ago quarter and ahead of the First Call three-analyst estimate of $202 million.

The company said sales were boosted by a new TV ad campaign and a new product lineup. In addition to its original approach of having customers book travel before knowing the names of the hotels in which they would sleep or the airlines on which they would fly, the company has started selling airline tickets and car rentals with the relevant brand names fully visible to potential customers.

The acquisition announced Monday of an additional 71.4% stake in Travelweb.com extends this strategy into the hotel business. Travelweb, in which priceline.com already had a 15% stake, enables customers to book brand-name rooms such as those of its founder hotels of Hilton, Hyatt, InterContinental, Marriott and Starwood.

Separately, priceline.com said it planned to file a shelf registration with the

Securities and Exchange Commission

covering up to $100 million of common stock or debt issuable by priceline.com, and up to 10 million shares in the company held by Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited. Together, those firms own 12.7 million priceline.com shares, according to the company, or 34% of its outstanding shares.