Morning Commentary: Priceline tanks on profit-warning; Spirit Realty slips ahead of earnings report

By Rebecca Melvin

New York, May 4 – Priceline Group Inc.’s 1% convertible due 2018 dropped more than 10 points on an outright basis in active trade early Wednesday after the Norwalk, Conn.-based travel site warned that current quarter profit will not grow as much as previously expected.

Priceline’s first-quarter earnings were strong, but it said that second-quarter results will be hurt by the timing of some holidays, including Easter, and costs associated with the company’s promotion of its Booking.com brand.

Priceline’s 1% bonds dropped to 136.875 in active dealings from about 148 previously, according to Trace data.

Priceline shares were down about 10% to $1,217.45.

Other reports on traders’ radars on a heavy earnings day included that of Spirit Realty Capital Inc. Spirit’s 3.75% convertibles due 2020 slipped to about 109.5 from 110 to 111 ahead of the earnings report of the Scottsdale, Ariz.-based real estate investment trust expected after the market close.

Spirit’s convertibles have run up recently on S&P’s upgrade of the REIT’s corporate credit rating and the convertibles.

Spirit Realty shares were higher by a dime, or 0.9%, in the early going at $11.65.

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