Internet commerce company Priceline.com Inc. Monday posted a narrower fourth-quarter net loss and reported a profit before special items as growth in its hotel business helped offset the slowdown in airline travel after the Sept. 11 attacks.

Priceline, which markets name-your-own-price air fares, car rentals and hotel reservations, also said first-quarter revenue and earnings before items will meet or fall slightly short of Wall Street's average expectations as low retail airfares weigh on the number of offers that result in successful sales.

The company, in which two firms controlled by Hong Kong tycoon Li Ka-Shing own a combined 27 percent stake, said its fourth-quarter net loss narrowed to $1.3 million, or 1 cent a share, from $105.1 million, or 62 cents a share, a year earlier.

The Norwalk, Connecticut, company posted a pro forma profit of $3.3 million, or 1 cent a share, compared with a year-earlier loss of $25 million, or 15 cents a share. The results exclude restructuring and special charges, option payroll taxes and losses on the sale of stock and amortization of stock-based compensation charges.

Revenues rose to $235.3 million from $228.2 million, toward the top of Priceline's target range of $215 million to $235 million.

Wall Street analysts on average had expected the company to break even on a per-share basis and to post revenues of $225.5 million, according to Thomson Financial/First Call.

Hotel reservations and car rentals accounted for 47 percent of Priceline's booked offers in the quarter, up 31 percent from a year-earlier.

Overall, travel took a hit after the Sept. 11 attacks but has slowly been recovering. Online travel, however, risen sharply in the last year, boosting the fortunes of companies like Priceline and rivals Expedia Inc. and Travelocity.com Inc.

OUTLOOK

Priceline sold a combined 2.3 million units of travel during the fourth quarter, with hotel room nights more than doubling from a year earlier, while airline tickets only rose 4 percent. The company added 854,082 new customers, and repeat business reached 63.6 percent, up from 54.5 from a year earlier.

Priceline said it sees first-quarter revenue of $260 million to $290 million -- shy of Wall Street's average forecast of $290.95 million, as compiled by First Call.

The company said it expects to post pro forma results ranging from break-even to a profit of 2 cents a share, including the effects of a significant increase in online and offline marketing spending and a 1-cent-a-share loss due to consolidation of its European operations.

While the forecast is at best in line with the average Wall Street earnings estimate of 2 cents a share, one analyst said it has some upside, given Priceline's deal last week to create a travel service for online auctioneer eBay Inc .

"The most positive is that they did very well, outlook is strong, and that's even before considering eBay," Thomas Weisel analyst Jake Fuller said. "They didn't raise guidance like we have seen with the others (online travel firms), but I think you probably have some upside to those numbers if you consider the strength in their core businesses and as you layer in some possible contributions from eBay."

For the full year, Priceline said it is comfortable with First Call estimates for pro forma earnings of 12 cents a share. The company posted 2001 pro forma earnings of $15.1 million, or 7 cents a share, on revenue of $1.17 billion.