Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Booking Holdings (formerly Priceline) -- Ignore unavailable to you. Want to Upgrade?

To: Sam Citron who wrote (2175)	1/27/2000 3:23:00 PM
From: dav	Read Replies (1) \| Respond to of 2743

Priceline Sees Profit in 2001 First Half By Matthew Lewis NORWALK, Conn. (Reuters) - Priceline.com Inc., the Internet company that allows consumers to ``bid' on everything from airline tickets to hotel rooms, said on Thursday it expects a very strong year, with smaller and smaller operating losses leading to profitability in the first half of 2001. ``We expect to continue to reduce operating losses throughout 2000,' Chairman and Chief Executive Richard Braddock said in a conference call with analysts and reporters after the company released its fourth-quarter earnings report. Priceline's (NasdaqNM:PCLN - news) fourth-quarter operating loss was $12.7 million, compared with a loss of $12.9 million in the same 1998 quarter. The net loss per share, excluding certain items, was 6 cents, 2 cents better than analysts had expected, according to First Call/Thomson Financial. A year earlier the company lost 14 cents a share. ``In 2000 we will target revenues of $1 billion (compared with $482 million in 1999), and we will move up our date for profitability from the second half of 2001 to the first half of 2001 -- which is a substantial difference,' said Dan Schulman, Priceline president and chief operating officer. The expectations for earlier profitability are based on faster-than-expected growth in customers, revenues and gross margins, Schulman told Reuters in an interview. He said analysts' estimates of a loss of 25 cents per share in 2000 are ``in the right ballpark.' The Norwalk, Conn.-based company, which went public last year, on Wednesday unveiled plans to expand into Asia, its first foray outside the United States. Priceline shares were down 1-1/4 at 65 in afternoon trading on the Nasdaq stock market. Volume was 4.7 million shares. ``I'm surprised the stock is down because we felt the earnings were incredibly impressive,' said Lauren Cooks Levitan, an analyst at Robertson Stephens. ``Their strength in multiple parts of their business reflects the power of the brand and the ability of Priceline to become a very big company.' Levitan reiterated her ``strong buy' rating on the stock. Priceline is enjoying a ``strong' gross margin trend, Braddock said. Fourth-quarter gross margin was 14.2 percent, the highest ever. This compares with 12.2 percent in the third quarter and 9.8 percent in the second quarter, he said. Priceline's full-year 1999 net loss was $52.5 million, or 39 cents per share, excluding certain charges, compared with a 1998 net loss of $44.4 million, or 55 cents per share. The company sees ``very strong momentum...and we're extremely enthusiastic as we enter the year 2000,' Braddock said. Purchases by repeat customers -- which tend to be more profitable for Priceline than purchases by first-timers -- are up dramatically, Schulman said. Some 35 percent of purchases in the fourth quarter were from repeat customers, up from 21 percent in the first quarter of 1999, he said. ``We're on a great trend,' Schulman said. ``Customers are coming back in droves right now. The important thing is we're also now putting into place additional...services for customers that have much higher velocity levels.' Priceline's privately held licensee for online supermarket groceries, Priceline WebHouse Club Inc., is seeing 82 percent of its purchases from repeat customers, he said. Customers are also starting to do more cross-buying across Priceline's product platform, he said. For instance, some 50 percent of Priceline's hotel customers also bought airline tickets during the fourth quarter, up from 33 percent in the third quarter. Priceline said it expects no significant selling when a lock-up agreement covering about 100 million shares expires on Feb. 7. More than 90 percent of the shares are held by senior officers and directors. The lockup dates from a secondary stock offering last August. ``Based on all of our conversations with everybody, most people are in the mode (that) the stock is undervalued, and they are holding their shares,' Schulman said. Priceline views the 1999 results as a vindication of its business concept, Schulman said. ``We are a virtual company: We don't hold inventory, we would not exist if it were not for the Net,' he said. ``The vision that we have is almost to turn Priceline into a verb,' Schulman said. ``If somebody wants to buy on their terms, they want to save money...we want them to come to our site.'