Shares of $PCLN Negotiated Lower on Truly Heinous Guidance

I haven’t seen an earnings warning like this in quite some time. It’s certainly noteworthy to see a bellwether, like PCLN, give guidance, so bad, it boggles the mind.

The company is guiding down by almost $3.50. This isn’t a minor blip, but a collapse.

Reports Q1 (Mar) earnings of $10.54 per share, $0.90 better than the Capital IQ Consensus of $9.64; revenues rose 16.7% year/year to $2.15 bln vs the $2.12 bln Capital IQ Consensus.

Co issues downside guidance for Q2, sees EPS of $11.60-12.50 vs. $14.96 Capital IQ Consensus Estimate.

Year-over-year increase in room nights booked of approximately 15% – 22%.

Year-over-year increase in total gross travel bookings of approximately 11% – 18% (an increase of approximately 11% – 18% on a constant currency basis).

Year-over-year increase in revenue of approximately 7% – 14%.
Year-over-year increase in gross profit of approximately 9% – 16% (an increase of approximately 9% – 16% on a constant currency basis).

Adjusted EBITDA of approximately $740 million to $795 million.

Gross profit for the quarter Priceline Group was $2 billion; +21% y/y US dollars and by about +27% on a constant currencyior year.

Gross profit was helped by performing in Q1 this year versus Q2 last year.

Estimate the early Easter timing shift of about $40 million of gross profit in adjusted EBITDA into Q1 that would’ve been recognized in Q2.

The timing shift benefits Q1 gross profit operating profit adjusted EBITDA net income and operating margins and will exert pressure on those metrics in Q2 in both cases compared to the prior year.

This is one of the greatest performers I’ve ever seen. The stock has steadily risen to new heights, under the radar, and mostly without pause. I’ve seen misses in high price stocks have minor effects on the share price, due to a strong and fervent shareholder base. There aren’t many people willing to fork over $1,200 per share. Mostly, this stock is owned institutionally and those fuckers aren’t likely to sell after one bad quarter.

Thus far, the stock is lower by 10%. I’d expect any other stock to be down 25-30% on guidance this bad.