Priceline Drags the Travel Sector Down

Priceline has manage to drag the travel sector down after they reported a weakness in their sales around the globe. The second quarter for the company was solid, beating the predictions of analysts, however, they made some investors wonder about the future of the sector. Shares of the Priceline website dropped by 17.1%, which is 20.03 dollars, closing at 97.17 dollars on August 6th. Meanwhile, the stock of Expedia dipped by 4.7%, which is 91 cents, closing at 18.61 dollars, and Orbitz fell by 2.8%, which is 16 cents, closing at 5.59 dollars.

Jeffery H. Boyd, the Chief Executive of Priceline, said that the uncertainty of the economy and high price of fuel are affecting a broad section of the travel market, and the significant capacity reductions from airlines during the fall are also going to negatively impact the travel industry. Throughout the first part of the year, they believe that the impacting positive trends on their international and domestic businesses have overshadowed the negative influences.

Priceline said that, for the whole year of 2008, they now anticipate an increase in gross travel bookings to 7.9 billion dollars from 7.6 billion dollars, while earning 5.85 dollars per share from 5.50 per share, coming from their previous guidance range at 5.65 dollars per share from 5.25 per share. They anticipate that their earnings for the 3rd quarter will be between 2.0 dollars to 2.15 dollar a share in comparison to the consensus prediction from analysts of 2.05 dollars.

Visit www.priceline.com to learn more.