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Tech Industry

Priceline sees $1 billion in sales for 2000

Priceline.com (Nasdaq: PCLN) topped Wall Street estimates Thursday with a fourth quarter operating loss of $12.9 million, or 6 cents a share, on sales of $169.2 million. The company also set a revenue target of $1 billion for fiscal 2000.

First Call consensus had expected a loss of 8 cents a share. Priceline had preannounced its results earlier this month.

The fourth quarter operating loss, which excludes warrants to partners and other items, was narrowed compared to the fourth quarter when Priceline lost 8 cents a share and a year ago when the company lost 14 cents a share. Sales were up 791percent compared to $19 million a year ago.

Priceline also recorded a fourth quarter gross margin of 14.2 percent and added 1 million customers in the quarter. The company now has a customer base of 4 million.

The company was also bullish on 2000, estimating it can more than double 1999 sales of $482.4 million. Priceline said based on early first quarter performance the company can hit $1 billion in revenue in 2000.

"Based on our performance so far this year, we are now comfortable that our revenues will increase sequentially from the fourth quarter of 1999 to the first quarter of 2000 at a rate of at least 30 percent," said Richard S. Braddock, in a statement. "We have established a target of $1 billion of revenue for the year 2000.''

Although Priceline's operating results are impressive, the quarter looks a lot different including charges. The first quarter operating results exclude a non-cash charge of $910.4 million of net warrant costs related to the issuance of warrants to airline partners, a non-cash charge of $380,759 for supplier warrant charges, $264,744 in option payroll taxes resulting from the exercise of non-qualified employee stock options, and the write-off of $380,609 in deferred financing costs.

Priceline has locked up distribution agreements with most of the major airlines, but had to give airlines a piece of the company. In November, Priceline announced American Airlines, United Airlines and US Airways would join Priceline's airline service.

Including warrants and charges, Priceline reported a fourth quarter loss of $921.5 million. For the year, Priceline reported sales of $482.4 million and a net loss of $1.1 billion. Excluding charges, Priceline lost $52.5 million, or 39 cents a share, for 1999.