Priceline forecasts profit below estimates as expenses rise


Online travel agency Priceline Group Inc forecast third-quarter earnings below analysts' estimates, mainly due to heavy spending on its international expansion.

Shares of the operator of, and fell 2.5 percent before the bell.

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The company's operating expenses rose nearly 39 percent to $1.15 billion in the second quarter ended June 30. (

"We will continue to build our franchise by investing in customer experience, content expansion and market penetration," Chief Executive Darren Huston said in a statement.

Priceline has been expanding in fast-growing markets such as Asia. The company said last week that it would invest $500 million in China's International to give customers access to more than 100,000 places to stay in the Greater China region.

Priceline forecast an adjusted profit of $19.60-$21.10 per share for the third quarter ending September. Analysts were expecting $21.28 per share, according to Thomson Reuters I/B/E/S.

Priceline's net profit rose about 32 percent in the second quarter as hotel and airline gross bookings increased 34 percent.

International bookings rose by more than a third in the quarter, accounting for 86 percent of total bookings.

Net profit available to common shareholders rose to $576.5 million, or $10.89 per share, from $437.3 million, or $8.39 per share, a year earlier.

Excluding items, Priceline earned $12.51 per share.

Revenue rose 26 percent to $2.l2 billion.

Priceline's shares closed at $1,281.56 on the Nasdaq on Friday. (Reporting by Abinaya Vijayaraghavan in Bangalore; Editing by Kirti Pandey)