Groupon Inc (NASDAQ:GRPN) will post its third quarter 2013 results on November 7th, and analysts at Ascendiant are expecting results to be marginally below the estimates. Analyst Edward Woo from Ascendiant expects revenue to come in at $625 million and earnings per share at $0.01 while consensus for revenue is $616 million with EPS of $0.01.Groupon

Performance to be similar 2Q

In the second quarter, annual revenue slipped at a brisk pace. Gross billing, however, increased 10% compared to the first quarter’s 4% surge.  Groupon Goods were in line with the first quarter rise of 17%, and made up for the decline of 17% in its daily deals business.  Domestic revenue surged 45% year on year, but international revenue came in low and were down 25% year on year. Analyst expects third quarter numbers will also be mixed.

Analysts expect guidance for the fourth quarter to come in below the consensus estimates for revenue at $274 million and EPS of $0.06. Also, decline in daily deals will substantially affect the fourth quarter results.

Groupon rebounds In United States

According to the Woo, Groupon Inc (NASDAQ:GRPN) has substantially improved its business in the United States, and is also looking forward to stabilizing its international business. Woo, however, remains cautious and notes that there is still lot to be done. Groupon’s unstable performance can be attributed to staff turnover, competition and increased investments. Decline in growth and weak margins will probably “bolster continued skepticism as to Groupon’s valuation, growth prospects, and profit potential.”

Potential catalysts

A few months back, Groupon Inc (NASDAQ:GRPN) announced Eric Lefkofsky as the next CEO. Also, the company declared a $300 million share repurchase program. The analyst believes both pieces of news will drive “near-term optimism for the company.”  Groupon’s performance in ‘Goods’ business continues to be solid, however, it is impacted by the drop in the daily deals industry in the third quarter.

The company has concluded string of acquisitions and launched various products like Breadcrumb (POS for restaurants), Savored (online provider of restaurant reservations), and Groupon Payments (payments service for small businesses).

Analysts hold the view that these factors will fuel the growth of Groupon Inc (NASDAQ:GRPN) in the longer term, but will put pressure of incremental costs in the near term. Groupon’s stock has gained substantially in fiscal 2013 owing to its enhanced business. According to the analyst, though the business looks good, it it is still not confirmed that the company is on a stable path towards growth and profitability.

Woo maintains a Sell rating on Groupon Inc (NASDAQ:GRPN) with a price target of $8.