, the online travel company, said fourth-quarter profit plunged 24% as the company incurred more expenses to remain competitive.
Net income was $3.79 million, or 10 cents a share, compared with $4.99 million, or 13 cents a share, a year earlier, the Norwalk, Conn.-based company said in a statement. Pro forma profit was $11.4 million, or 28 cents a share, beating the 27-cent-a-share average estimate of analysts surveyed by Thomson Financial. Revenue rose 4.6% to $203.9 million, below the consensus forecast of $205.8 million. Operating expenses soared 87% to $58.9 million.
Priceline forecast pro forma net income this year of $1.50 to $1.65 per share. Analysts were looking for $1.55. Gross bookings will be between $2.7 billion to $2.9 billion, up about 25% from last year.
"Given the rapid growth in the retail hotel business, we anticipate a shift in our earnings seasonality, with higher seasonal earnings in the second and third quarters of 2006," says Chief Executive Jeffrey H. Boyd, in a statement. "With the investments we are making in this business, a supplier- and consumer-friendly service lineup and the efforts of our teams in the United States and Europe, we believe priceline.com is building a leadership position in worldwide online hotel sales."
Shares fell 75 cents to $21.60 in after-hours trading.
Both Priceline and rival
are increasing their spending on their businesses as they face heightened competition.
Shares of Bellevue, Wash.-based Expedia dropped 18% Thursday following a disappointing earnings performance driven in part by higher expenses.