Priceline earnings: Profit and revenue shine in the first half
Priceline Group reported its second quarter earnings this morning, US time.
The topline: Looking at the first half of the year, the online travel giant reported total revenue of $3.76 billion, jumping 26% from the first half of 2013 — as hotel and car bookings rose.
Nice margins, but lowering expectations: Even as its revenue has grown rapidly, Priceline’s operating margin has increased steadily to 35.6% so far this year — steadily upward from 10% in 2007. Yet the company issued guidance for the third quarter that was lower than analyst expectations, suggesting some mild headwinds ahead.
Notable numbers: Advertising costs – primarily for online ads – remained at 38.6%, the same as a year earlier. Ad costs seem to be hovering at a new plateau, having drifted upward since the economic recovery in 2011, when ad costs were only 31.1% of gross profit.