Priceline Group Earnings: Company Expects 4% YOY Decline, Crowd Projects 4% Growth, Experts Stand In Between

Priceline Group Inc PCLN is scheduled to report its first quarter financial results before the market opens on Thursday, and the company guided earnings well below those registered last quarter, and in the first quarter of 2014.

In the first quarter of 2014, the travel company retrieved earnings of $7.81 per share on revenue of $1.642 billion, comfortably surpassing guidance and estimates. In the last reported quarter, earnings also came in above consensus and guidance, at $10.85 per share, on revenue of $1.84 billion.

A history of either meeting or beating expectations bodes well for this quarter, for which the company guided earnings of $7.48 per share, the Street, earnings of  $7.80 per share (on revenue of $1.809 billion), and the crowd, earnings of  $8.12 per share (on revenue of $1.843 billion).

As evidenced by the chart above, which illustrates the evolution of estimates over time, sentiment has become increasingly bearish on Priceline.

Market Position, Compelling Products And Innovation

In a recent article, analysts at Zacks said, “Priceline’s strong market position, compelling product lines, continued innovation and strong position in emerging international markets are expected to drive results in the soon-to-be reported quarter.”

The research firm remains optimistic about “Priceline’s dominance and growth prospects in the strengthening online travel agency market aided by mobile usage and metasearch. Priceline has been steadily building position in emerging international markets. It is increasing its hotel inventories, entering into strategic alliances and making acquisitions that should contribute to first-quarter results and beyond.

For the first quarter, Priceline recorded a year-over-year revenue increase of 4%-11%. Priceline expects gross profit dollars to increase 9%-16% (21%-28% on a local currency basis), with adjusted EBITDA in the range of $475 million to $510 million. Pro forma EPS is expected to come in the range of $7.20-$7.75, based on a 15% tax rate and 52.7 million shares. GAAP EPS is expected to be $5.25 to $5.80.”