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Priceline shares sink on weak guidance

Priceline.com
Andrew Harrer | Bloomberg | Getty Images

Priceline reported better-than-expected first-quarter earnings Wednesday, yet the travel giant's stock was down 7.5 percent on weak forward-looking guidance.

The company said its growth would slow in the second quarter as it spends more on marketing and as timing of holidays shifts traveler bookings.

Priceline expects bookings to rise as much as 18 percent in the second quarter; it say it will earn up to $12.50 per share on an adjusted basis. That's short of the 21 percent rise and $14.90 in earnings per share that Cowen analyst Kevin Kopelman said Priceline needed to forecast.

The firm's weak guidance is the second piece of negative news investors have had to digest in less than a week.

Last Thursday, CEO Darren Huston resigned following an investigation overseen by independent members of the board into the circumstances surrounding an illicit relationship.

Over the past year, Priceline shares have fallen 1.14 percent, but they have gained more than 15 percent over the past three months.

— Reuters contributed to this report.