Nov 7 (Reuters) - Shares of Priceline Group Inc fell 10 percent in early trading on Tuesday after the U.S. online travel service provider forecast fourth-quarter profit sharply below Street expectations, as it spends heavily to expand advertising its Booking.com to 18 more countries.
The company's shares were trading at $1,715 and were the biggest drag on the S&P 500. Shares of rival Expedia Inc were down 2.6 percent.
Priceline said on Monday it expected adjusted profit of $13.40 per share to $14.00 per share, well short of analysts' average estimate of $15.56, according to Thomson Reuters I/B/E/S.
The company also said it expected booked room nights to grow 8 percent to 13 percent in the current quarter, a steep drop from the 31 percent growth posted in the year-ago quarter.
Priceline plans to boost advertising its Booking.com online travel agent website to about 30 countries by the year-end, up from 12 in 2016. The owner of brands such as Priceline.com, Booking.com, Kayak said the jump in costs would pressure margins in the current quarter as well as in the first quarter.
At least 10 brokerages cut their price targets on the stock, with Deutsche Bank the most bearish, cutting it by as much as $225 to $1,825.
The near-term growth rates are likely to be negatively impacted and the company will need to disprove investor skepticism about its capability to brand build, Morgan Stanley analyst Brian Nowak said in a note.
Expedia last month posted earnings that fell well short of analysts' estimates and also slashed its full-year profit forecast.
(Reporting by Rachit Vats in Bengaluru; Editing by Sriraj Kalluvila)