Priceline.com Inc., which allows consumers to name their prices for airline travel and hotel stays, this week announced its first profitable quarter, albeit on a pro forma basis.
The Norwalk, CT, company reported pro forma net income of $11.7 million on second-quarter revenue of $364.8 million, up from $352.1 million in the year-ago period.
In yet another encouraging sign, priceline.com's cash balance at the end of the second quarter rose to $165.7 million, up from $138.7 million in the year-ago period and $142.6 million in the first quarter.
“We are pleased that our airline ticket sales have substantially recovered, despite the difficult airline travel market and competition from heavy discounting by the major carriers,” Jeffrey H. Boyd, president and chief operating officer at priceline.com, said in a statement.
Boyd said priceline.com also stood to benefit from an inventory advantage over competitors, particularly in its fast-growing hotel and car rental categories.
A major boost in the second quarter for priceline.com came from the addition of 1.025 million customers. This now swells its customer base to 10.9 million. Repeat business was up 61 percent this second quarter from the year-ago period, while in second quarter 2000 repeat business had increased 39 percent from second quarter 1999. In the first quarter, repeat business increased 58 percent from first quarter 2000.
Based on its second-quarter results and the firm's performance last month, priceline.com expects third-quarter revenue to exceed $341 million, the number posted in third quarter 2000.
“We expect priceline.com to continue steady growth of customers extending beyond our current 11 million customers,” Richard S. Braddock, the company's chairman/CEO, said in a statement.
“That customer database has the potential to yield even more incremental growth as we develop even more efficient database marketing tools and continue to build on our repeat business ratio,” Braddock said.
