Online travel agency priceline.com's second-quarter net income rose to $54.1 million, from $34.6 million in the year ago period.

Published: 06 Aug 2008

Online travel agency priceline.com's second-quarter net income rose to $54.1 million, from $34.6 million in the year ago period.

The company said its bookings amounted to $2.1 billion billion, a 71 percent increase over the year-ago period. Bookings on Priceline's international operations increased 80 percent, while domestic bookings increased 59 percent.

Company's shares fell about 15 percent after the company warned of potential troubles related to the economy and airline capacity cuts.

"Economic uncertainty and high fuel prices are affecting the broad travel market and significant airline capacity reductions in the fall will also have a negative impact," Priceline Chief Executive Jeffery Boyd said in a statement.

He added, "The business continues to benefit from growth in participating hotels, which at over 52,000 are up approximately 50 percent year-over-year, geographic expansion, effective marketing and favorable foreign exchange rates, which have driven growth in bookings and earnings."

"The things that are propelling the business are that we had a very significant increase in airline ticket sales tied to our no-fee initiative and what we think is pretty effective marketing," Boyd said, referring to its elimination of bookings fees on the purchase of airline tickets.

For 2008, Priceline said that it expects to generate about $7.55 billion to $7.9 billion in gross travel bookings. That forecast is consistent with previous guidance.