NEW YORK (AP) — Worries about a weak global economy haven't taken the air out of online travel websites.
Shares of TripAdvisor and Priceline.com jumped before the opening bell Friday after both surprised investors Thursday with better-than-expected third-quarter profit.
Priceline.com Inc.'s profit grew 27 percent as customers made more travel bookings on its website. TripAdvisor Inc.'s net income rose 9 percent as advertising and subscription revenue grew. The company offers reviews of hotels, restaurants and vacation spots, but then directs travelers to other sites to book.
Management at both companies suggested that earnings should hold up in the near future despite continued concerns about economic growth across the world, especially in Europe.
Herman Leung, an analyst with Susquehanna Financial Group, raised his price target on Priceline by $30 to $750. He also suggested that the company's forecast for the fourth quarter indicates bookings in Europe — one of its most important markets — are accelerating.
The analyst also noted that TripAdvisor's business appears to be stabilizing.
Expedia Inc., the world's largest online travel agency, reported third-quarter earnings late last month that also beat Wall Street's expectations. Orbitz Worldwide Inc. is set to report its results for the quarter next week.
TripAdvisor gained $6.28, or 21 percent, to $35.69 before the opening bell. Priceline.com added $62.40, or 11 percent, to $648.50. Expedia stock also added $1.24, or 2.1 percent, to $60.92, while Orbitz shares were inactive premarket.
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