Priceline Profits Rise; Volcanic Ash Clouds Future Earnings

Online travel service Priceline.com has seen its share price drop after it warned that this year’s profits may be hit by disruption from the Icelandic volcano. The blow came after the Norwalk-based company announced a big increase in first quarter earnings. WNPR’s Harriet Jones reports.

Priceline earned almost $54 million in the first quarter, $1.06 per share. That compares to 53 cents a share in the same quarter of 2009. Excluding one time items, Priceline’s earnings per share were $1.70, which exceeded Wall Street’s expectations. The company said hotel room reservations and international bookings were strong areas of growth.

But Priceline executives warned that second quarter earnings may not compare quite so well. The shutdown of European airports because of the Icelandic volcano has hit business as has the financial turmoil in Greece. Elsewhere in the world, civil unrest in Thailand has cut down on travel there.

In after-hours trading on Monday, Priceline’s stock dropped more than 11%. The company said hotel occupancy levels are increasing in the run up to the normally busy summer travel season.

For WNPR, I'm Harriet Jones.