Updated from Nov. 5
plunged 29% Wednesday after the company, blaming "difficult conditions" in the airline industry, fell short of analysts' third-quarter earnings estimates Tuesday evening.
The name-your-own-price online retailer, which took a charge related to overseas licensees and said it would lay off 15% of its staff, also gave fourth-quarter guidance below analysts' forecasts.
"In a word, our results for the quarter were disappointing, though the reasons were mixed," said Chairman Rick Braddock.
The company, which said its 46% decline in airline tickets sold reflected the "substandard" savings it could offer consumers, spent part of its conference call biting the hand that feeds it wholesale airline tickets. Executives said airlines' publication of discount fares on the Internet was counterproductive for their business. Rather, suggested priceline.com executives, carriers' yields would suffer less if they moved unsold inventory to priceline.com.
priceline.com's shares, down 66% from their 52-week high, dropped 67 cents Wednesday to $1.64.
For the third quarter ended Sept. 30, priceline.com reported break-even pro forma earnings per share on revenue of $240 million. Analysts surveyed by Thomson Financial/First Call had forecast pro forma EPS of a penny on revenue of $262 million.
GAAP results for the quarter amounted to a net loss of $24.3 million, or 11 cents a share. That number includes a noncash charge of $24.2 million, reflecting a downturn in the value of the company's investment in European and Asian licensees.
The latest-quarter loss reversed the year-ago profit of $5 million. The year-ago bottom-line loss was 2 cents a share after preferred dividend payments. Revenue slid from $302 million a year earlier.
For the fourth quarter, priceline.com forecast revenue lower than $218 million, compared with the First Call forecast of $245 million. Instead of the penny in pro forma earnings per share expected for the fourth quarter, the company's guidance ranges from a 2-cent loss to break even.
That forecast doesn't include the $4 million to $5 million worth of charges priceline.com expects to take for cutting 65 staff and consultant positions. The company told analysts to expect fourth-quarter operating losses to continue into the first quarter as the company launches what it calls its largest advertising campaign in two years.
priceline.com says it continues to refocus its resources on travel business aside from name-your-own-price airline tickets. That includes the company's hotel and vacation package businesses and discounted fares on Lowestfare.com. The company, which acquired Lowestfare.com's domain name and trademarks earlier this year, hopes to get conventionally priced retail sales up and running on the site within a few weeks.
Among other measures announced Tuesday, the company will no longer sell name-your-own-price telephone calling minutes.