Priceline forecast disappoints as China, France travel slows
Shares of Priceline fall most in six months, wiping out 2016 gains; TripAdvisor also falls after missing analyst profit estimates
Shares of online travel giant Priceline tumbled the most in six months Wednesday after it projected second-quarter earnings that fall short of analysts’ estimates, blaming an earlier Easter holiday, costly new advertising campaigns and weakened demand for travel to France and China. Similar issues with international travel and greater investments affected TripAdvisor, which tumbled in extended trading after reporting earnings that missed estimates.
Continued trepidation by tourists to visit France after the November terrorist attacks in Paris is having an effect on revenue, Chief Financial Officer Daniel Finnegan said on a conference call. Travel to China, another key destination, is also weak because the country’s pollution problems are dissuading potential visitors, Boyd said on the call.
TripAdvisor reported first-quarter profit of 32 cents a share on revenue of $352 million, the company said in a statement, falling short of the average analyst estimate of 46 cents and $370.4 million. The Needham, Massachusetts-based company fell as much as 12 percent in after-market trading.
TripAdvisor is building its own internal booking system to let customers who use it for hotel reviews reserve their rooms without leaving the website. Investment in that platform hurt the company’s hotel revenue.
Locked in its global battle with Expedia and others, Priceline is known to have been interested in acquiring TripAdvisor for some time, according to a report of Skift.
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