Priceline's 3Q Conference Call Summary

On Thursday, priceline.com Incorporated

PCLN

had their Third Quarter 2013 Conference Call. Third Quarter Results:

Consolidated gross bookings for the quarter were up 38% YoY (36% on a local currency basis) at $10.8 billion.
Non-GAAP net income was $17.30 per share, up $0.40 versus prior year, at $920 million. These results surpassed FactSet consensus of $16.23 per share guidance for the quarter.
Worldwide hotel room night reservations were $74.8 million in 3Q, up 36% year-over-year.
International business recorded was down 44% QoQ with 41% gross bookings growth on a local currency basis. International gross profit generated was $1.8 billion.
Booking.com's platform grew 45% since last year with now over 355,000 hotels and other accommodations. Priceline's CFO Daniel Finnegan noted that "Booking.com is also executing well in changing distribution environment with, we believe, share gains. And its U.S. brand building has added to its momentum in this country."
Agoda and Booking.com is increasing their exposure to international business travel to and from China.
Priceline's domestic gross bookings grew 17% due to rising ticket prices, airline ticket sale growth, hotel reservation growth, and increased rental car reservations.
Finnegan commented, "Rentalcars.com has exciting opportunities ahead: building share in international markets, expanding its mobile footprint, and investing in customer experience and brand.
KAYAK referrals aided Priceline's accelerating growth this quarter.
Hotel room nights booked grew 36% in the third quarter.
Average daily rates were up on a local currency basis by 1.8% for the group.
Rental car days booked were up 28%.
Gross profit for the third quarter was up 42% YoY at $2 billion.
KAYAK revenue was reported at $68.4 million.

Guidance Forecast:

International gross bookings are expected to grow 29% in U.S. dollars, or 28% on a local currency basis.
Fourth quarter revenue is expected to grow year-over-year to 26%, an approximate 19% increase. Gross profit dollars is expected to grow 30% to 37%.

Notable Quotes from the Call from Daniel Finnegan

"I think our mobile businesses are performing very well in the marketplace. We have not been publishing share data in terms of the amount of reservations running through mobile platforms, but based on what we're seeing, we feel very good about the extent to which we are building mobile penetration in the group, especially looking at some of the disclosures that have been made by competitors."
"We saw some softness in demand for rentalcars.com, particularly in their biggest market in the UK. And what's going to chalk that up to, whether it's comping against the Olympics or great weather, we just saw some softness there. Overall, the business continues to perform very well. It was also just comping against a very high growth rate in the prior year."
"So same day bookings I think has taken on a little bit of increased importance in our space because of the mobile product that's now essentially ubiquitous. There's been a lot of development by our brands and others to try to drive same day deals to consumers via the mobile platforms and that's a compelling opportunity. And I think what's happening is that the availability of that product is changing people's behavior, that they're more comfortable waiting till the last minute to book a hotel in the hopes that they'll find a deal on their smartphone; so just a great example of technology changing behavior and representing an opportunity not just for consumers, but for brands like ours who can meet that demand."
"in terms of the CEO change, Darren [Huston] is leading the biggest brand within the group and as you guys can see, with all of our brands we're becoming an increasingly global business. And I think it's a very, very logical and great choice for Darren to be next CEO of the Group. As to the timing of it, part of that is personal. I've been involved in the business for 14 years and running it for most of that time. And I'm looking forward to the opportunity to doing some different things, but also looking forward to the opportunity to work with Darren to make sure that the business continues on its successful course."

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Priceline's 3Q Conference Call Summary