COMMENTARY -- It's not too difficult to take Priceline's slogan to new lows after a disappointing third quarter. Priceline, which allows you to name your own price on airline tickets and such, named its latest disaster.
The company met expectations with a pro forma loss of a penny a share, but the numbers were irrelevant because the outlook was horrible. In the span of about two hours Thursday evening, Priceline gave cynics enough material to last two quarters.
- Priceline named its own CFO after Heidi Miller split. And why wouldn't she leave? Her options had strike prices of $51 and $90, according to regulatory filings.
- Named its own layoffs, as 87 employees got the ax in a cost-cutting move.
- Named its own revenue growth as sales will be down sequentially.
- Named its own outlook, which was to put off any guidance until the fourth quarter conference call.
- Named its own excuse. "Negative publicity" hurt sales, execs whined. "The effects of negative news and other factors" dinged sales through October. Simply put, Priceline used the old "blame it on the messenger" trick. Gee, maybe the "other factors" such as customer service, airline problems and the Webhouse closing had something to do with the quarter too.
And so it went for Priceline's conference call, which required investors to take a massive leap of faith. The whole call cooked down to whether you believe in Priceline's management or not. To be sure, the sky is not falling despite the current woes. Priceline has cash in the bank and enough sales to break even.
But those facts didn't make the earnings fiasco any easier to swallow. We can't wait to hear William Shatner sing this tune.
Here are the issues to sort through:
The bottom line is that investors will have to name their own price for Priceline shares. You can bet shares will be cheap.TDAIN
• Priceline announces layoffs, sees slow sales ahead
• Priceline couldn't insulate investors from WebHouse
• Cupboard bare at Priceline's Webhouse
• Citing airline woes, Priceline sees lower sales
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