Priceline to Release Earnings After Close Thursday (PCLN)

Priceline PCLN is set to release its Q1 2011 earnings after the close today. Wall Street is expecting revenues of $778M and an EPS of $2.44. In the same period a year ago, the company reported revenues of $576M and a $1.63 EPS. The consensus estimate represents revenue growth of 35%, ahead of the 24% revenue growth rate that Priceline posted in Q1 2010. Recently, analysts at two Wall Street brokerages increased their target prices for Priceline.com. Piper Jaffray raised its target price to $630 and ThinkEquity raised its target price to $600. These moves follow the better than expected results posted by Expedia, a competing online travel agency. Investors will want to focus on potential increases in Hotel Bookings, Rental Cars and Airline tickets. Priceline breaks out these segments in a per unit basis, so a three-night stay would count as one hotel booking, or a two-day rental car would be a single car rental unit, and a single round trip ticket would be a single unit. Over the past several quarters, hotel bookings have represented 80% or more of total units. Revenue per unit sold decreased on a year over year basis in each of the last nine quarters, as competition in the industry increased. This decrease in margin has been stabilized by increases in bookings per unit in three of the last five quarters. International gross bookings is almost entirely comprised of hotel bookings and has been growing in terms of a percentage of the total bookings, reaching 72% in the most recent quarter. The first quarter is traditionally one of the strongest quarters for internal booking growth, so factor that into your analysis. The conference call begins at 4:30 EST Thursday.