Priceline Group Inc (NASDAQ:PCLN) released its third-quarter results on Monday which showed the company posting an earnings per share of $35.22 and beating expectations of $34.25. Revenues of $4.43 billion were ahead of the $4.34 billion that was expected in Q3, and the company’s gross bookings of $21.8 billion also came in higher than the $21.45 billion that analysts expected.
Despite the positive earnings, in after-hours trading the stock declined more than 9% as the company’s guidance for Q4 failed to impress investors. Priceline expects to achieve per-share earnings of between $13.40 to $14 in the current quarter, below initial estimates of $15.56.
Costs are rising for Priceline as the company is spending more on customer service as the company aims to capture more of the short-term rental market, away from Airbnb and other online-rental sites. However, because there is more customer services required for these types of rentals, that increases the company’s costs.
Priceline is working on growing its business not only in the U.S. but in China as well, where it has invested $450 million in a Chinese internet company. In addition, Priceline is investing in more TV commercials for one of its websites, Booking.com, in as many as 30 different countries next year.
The company that also owns Kayak.com and OpenTable has seen its share price rise 30% year-to-date and over five years has seen its share price triple. In three years, Priceline’s revenues grew from $6.8 billion to over $10.7 billion in 2016, for an increase of 58%.
The company still looks to have a lot of growth left and could be a great buy on the dip.
