Priceline.com Inc (PCLN), Expedia Inc (EXPE): Final Thoughts

For the first quarter of this year, the company had just $1.01 billion in total revenue. On this revenue it had a negative net income due to selling, general, and administrative expenses. It is important to note that while Expedia has more bookings overall, it does not have the most profitable bookings. Expedia Inc (NASDAQ:EXPE) has taken the strategy of providing everything to everyone, while Priceline.com Inc (NASDAQ:PCLN) has focused on the most profitable bookings.

It’s 2011 spinoff Tripadvisor Inc (NASDAQ:TRIP) has been growing substantially in the last year. The majority of TripAdvisor’s revenue comes from click-through and affiliate bookings to Expedia and Priceline. As Tripadvisor Inc (NASDAQ:TRIP) continues to expand and grow, bookings passed on to Expedia and Priceline will grow as well. This is a win for all three companies.

Most analysts expect a strong growth in revenue for Expedia Inc (NASDAQ:EXPE) this year due to marketing and exposure to more markets. The consensus is a 20% growth in revenue and an 8% growth in net income. This is a great sign for the company, but because the earnings won’t keep up with the revenue growth, investors should watch this stock closely.

Final thoughts

Even with lower guidance for the second quarter of this year, Priceline.com Inc (NASDAQ:PCLN) is a great company to consider for an investment. It has a strong history of growth and great potential for the next year. Its acquisition of Kayak Software Corp (NASDAQ:KYAK) will bring more earnings growth in the coming years and eliminate competition. Expedia will have to step up its marketing and operations to continue to compete. It doesn’t look like it will be the winner for a while.

The article Lower Guidance Doesn’t Mean Sell originally appeared on Fool.com and is written by Austin Higgins.

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