Gloomy projections about the next two quarters sent stocks of online travel agencies tumbling, even for those that reported positive quarterly results.
Priceline, which Wednesday reported strong second-quarter numbers — revenue up a hefty 21% and net income soaring 37% — still saw its stock fall 17% after CEO Jeffery Boyd gave lower-than-expected projections for the third quarter because of the eurozone crisis.
Lazard Capital Markets downgraded its Priceline rating to neutral, despite Priceline's strong balance sheet and strong hotel business. Lazard blamed Europe and strong competition for the downgrade.
Expedia, whose second-quarter revenue rose 14% from a year earlier, beating analysts’ estimates, initially saw its stock jump after the company announced its quarterly results last month. But after Priceline and Orbitz both cited economic uncertainty in Europe as cause for weak economic projections, Expedia’s stock fell 4.6% on Wednesday.
Orbitz Worldwide reported lower-than-expected second-quarter results and cut its revenue forecast for the year, saying Europe’s economic problems were having a chilling effect on business.
Orbitz reported net income of $4.6 million, down from $8.9 million a year earlier. Its stock fell 25%.
Orbitz said that it expects net revenue to be up between 2% and 4% for the year, saying the revised outlook reflects continued economic deterioration in Europe, weaker air volume in the U.S. and a negative impact from foreign currency exchange.
Follow Kate Rice on Twitter @krtravelweekly.