Priceline.com Incorporated (Nasdaq: PCLN) today reported its financial results for the 1st quarter 2007. Gross travel bookings for the 1st quarter, which refers to the total dollar value, inclusive of all taxes and fees, of all travel services purchased by consumers, rose 33.7% year-over-year to $998 million.

Priceline.com had GAAP revenues in the 1st quarter of $301.4 million, a 24.6% increase over a year ago. Priceline.com?s GAAP gross profit for the 1st quarter was $119.7 million, up 65.7% from the prior year. Priceline.com had a GAAP net loss for the 1st quarter 2007 of $16.3 million or $0.44 per diluted share. The GAAP results include, among other things, the impact of litigation settlement expenses and an excise tax refund. Several days ago, priceline.com announced that it had agreed to settle the securities class action litigation that was filed against the Company in 2000 and pay the class plaintiffs $80 million, of which $30 million will be funded by priceline.com?s insurance carriers. Priceline.com incurred a 1st quarter 2007 net charge of approximately $55 million to settle the litigation and cover expenses. Priceline.com also announced that in March and April it received notices from the Internal Revenue Service that the Company?s previously disclosed refund request for excise taxes paid on merchant airline tickets had been approved for payment. As a result, priceline.com recorded in the 1st quarter $15.9 million in revenue and $2.8 million in interest income related to the March IRS notice and expects to record approximately $3 million of additional income in the 2nd quarter 2007 related to the April notice, including estimated accrued interest.

Priceline had pro forma revenues in the 1st quarter of $285.5 million, an 18.0% increase over a year ago. Pro forma gross profit for the 1st quarter 2007 was $103.8 million, an increase of 43.1% over the same period in the prior year. Pro forma net income for the quarter was $17.4 million, or $0.43 per diluted share, which compares to $7.6 million, or $0.19 per diluted share in the same period a year ago. First Call analyst consensus for the 1st quarter 2007 was $0.27 per diluted share. The section below entitled ?Non-GAAP Financial Measures? provides a definition and information about the use of pro forma financial measures in this press release and the attached financial and statistical supplement reconciles pro forma financial information with priceline.com?s financial results under GAAP.

?First quarter pro forma earnings growth exceeded our expectations in both the United States and Europe,? said priceline.com President and Chief Executive Officer Jeffery H. Boyd. ?In Europe, Booking.com benefited from 91% growth in gross travel bookings as we continued to build the business across Europe. In the United States, pro forma earnings growth was driven by 8% growth in merchant gross travel bookings and greater efficiencies in marketing, which cost gross travel bookings, but significantly decreased acquisition costs.?

Looking towards the 2nd quarter 2007, Mr. Boyd said, ?We expect to see continued growth in our European operations from increased penetration of larger markets, geographic expansion and integration initiatives. In our domestic business, we believe the merchant business and marketing efficiencies will continue to drive domestic earnings growth; however, we believe that the impact of lower margins on retail airline tickets and the higher return hurdles we have imposed on marketing investment will continue to negatively impact the retail airline ticket business and, consequently, domestic gross travel bookings. As we approach the peak summer travel season, we believe that priceline.com?s Name Your Own Price? travel services can effectively meet the needs of consumers concerned with high fuel prices and mixed economic signals and we expect to emphasize that money-saving message as the Priceline Negotiator ad campaign featuring William Shatner continues.?