Priceline Group’s growth trends
Priceline Group (PCLN) noted in its quarterly filing that the company benefited from the consumer shift to online channels, especially the growing adoption of mobile platforms. Also, emerging markets like Asia-Pacific and South America saw increased growth in travel-creating opportunities for online travel companies like Priceline Group.
As a result, by investing in Priceline Group, Eton Park is also gaining exposure to emerging markets. So far, Priceline Group outpaced the emerging market’s iShares MSCI Emerging Markets (EEM). Priceline Group accounts for 0.54% of the iShares Russell 1000 Growth ETF (IWF).
For 2014, Priceline’s international business, mostly generated by Booking.com, represented ~87% of total gross booking.
In February, Expedia (EXPE) also announced its merger with Orbitz Worldwide (OWW) in an all-cash transaction worth $1.6 billion in enterprise value, or $12 on a per share basis. This deal will create aggressive competition in the market. To learn about this deal, read Expedia Plus Orbitz Will Equal Largest Online Travel Company.
Priceline shares jump 8.5% on strong 4Q14 results
For 4Q14, Priceline Group recorded bookings of $10.7 billion—up 17% YoY (year-over-year). Room nights booked grew by 24% and rental car days grew by 16%.
Priceline’s revenue was up 19% YoY to $1.8 billion. GAAP (generally accepted accounting principles) net income was $452 million, or $8.56 per diluted share—compared to $378 million, or $7.14 per diluted share, in 4Q13.
Full-year 2014 results
For full-year 2014, Priceline’s gross bookings grew 28% to $50.3 billion—primarily driven by growth in the hotel inventory of Booking.com. Its revenue grew 24% to $8.4 billion. GAAP net income for the full year was $2.4 billion, or $45.67 per diluted share—compared to $1.9 billion, or $36.11 per diluted share, in 2013.
Outlook for 1Q15
For 1Q15, Priceline expects its gross bookings to increase by 2% to 9%. Also, the company expects its revenue to increase by 4% to 11%. It expects its GAAP EPS (earnings per share) to be $5.25–$5.80. Priceline Group’s board of directors authorized a $3 billion share buyback program.