Priceline Traveling Overseas for Growth: CEO Boyd
Priceline.com, known for its name your own price travel auctions, will invest in Asia and Latin America to take advantage of growth opportunities in those regions, CEO Jeffery Boyd told CNBC's "Power Lunch" on Wednesday.
The company posted a better-than-expected fourth quarter on Tuesday, as hotel bookings improved. "We were pleasantly surprised to see a little bit of acceleration in our room night growth and in our international hotel results in particular," Boyd told CNBC.
Priceline.com earned $6.77 per share, excluding items, 23 cents better than estimates, as revenue jumped 20 percent versus a year ago to $1.19 billion. Gross bookings rose 33 percent with international bookings up 40 percent compared to the same period last year.
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The company also beat Wall Street forecasts despite its exposure to the troubled European market.
Looking ahead, Priceline expects travel bookings and gross profit to each increase 30 percent to 37 percent during the first quarter of 2013.
But there are some questions as to whether the company's earnings growth rate can continue as it invests more in its business.
"We look at the investments we're making in the business as an opportunity to build for growth into the future," Boyd said.
In particular, Priceline, which competes with Expedia and Orbitz, sees attractive opportunities in Asia and Latin America, where online travel is beginning to gain traction. "We want to be there and invest aggressively because those are great opportunities," he said.
Earlier Wednesday, Piper Jaffray analyst Mike Olson told CNBC that the online travel market is "huge, growing, and not saturated to any degree at all. The bottom line is that Priceline.com is doing whatever they can to take advantage of that."
Priceline CEO Boyd expects investors will appreciate the trade-off between growth and profitability if the company can deliver on that promised growth.