Priceline.com (PCLN – Analyst Report) honestly did nothing wrong or unexpected yesterday, as the company managed to beat the Zacks Consensus Estimate on both the top and bottom lines. But the market somehow turned inexplicably negative, sending the shares crashing.

Okay, Q4 guidance could have been stronger: management expects revenues of $1.92 billion at the mid-point while the analysts polled by Zacks are expecting $2.06 billion. But the bottom line is also important, and here management guidance of $11.50 at the mid-point far exceeds the Zacks Consensus of $11.17 a share.

So the company is exposed to FX, which travel company is not? And it also has exposure to China, giving people something to worry about because of the deceleration in Chinese GDP. The company’s hotel inventories in the country are also on the rise and it has investments in Ctrip (CTRP – Snapshot Report), which is one of the leading travel players in the country. China travel is on the rise despite the GDP concern, and Priceline is gradually building position.

Plus management usually offers conservative guidance, so investors probably have nothing to worry about.

Investors also appear to have forgotten that Priceline has signed on to TripAdvisor’s (TRIP – Analyst Report) Instant Booking platform, even as Expedia (EXPE – Analyst Report) maintained distance. The benefits of that alliance will kick in next year, with test runs starting as we speak. Priceline also uses meta search from Kayak, which it owns, further expanding distribution. Hopefully this will help it build position in the domestic business, which is a bit of a concern given Expedia’s strength and the ongoing consolidation in the market.

So with that, let’s dive into the numbers-

Revenue

Priceline reported revenue of $3.10 billion in the quarter, up 36.1% sequentially and 9.4% from the year-ago quarter. This was in line with management’s guidance of $2.96 billion (at the mid-point).

Revenue by Channel

Priceline’s operating model has been changing over the last two years or so, with the merchant business gradually becoming a smaller part. This is mainly because the agency business has been growing much faster.