Groupon Inc (GRPN) Shares Plummet 25% On Weak Earnings

Groupon Inc (GRPN) Shares Plummet 25% On Weak Earnings


Groupon Inc (NASDAQ:GRPN) shares are down 25 percent in after-hours trading after extremely weak fourth quarter results. It looked like things were turning around for Groupon (NASDAQ:GRPN) last month after the company’s stock price doubled from the low it hit in November.

Shares climbed throughout the trading day on Wednesday, increasing the stock’s value by 8 percent as analysts voiced high expectations for the daily deals giant. But then the company released its fourth quarter earnings report after closing bell, and it was revealed that Groupon Inc (NASDAQ:GRPN) couldn’t deliver on those high expectations.

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Consensus for Groupon’s earnings was 3 cents per share and $639.8 million in revenue for its December quarter. Even Piper Jaffray analyst Gene Munster upgraded shares of Groupon from Neutral to Overweight last week, saying he expected the company’s results to show continued strength. However the company reported losses of $81 million or 12 cents per share, an increase over last year’s fourth quarter loss of $65.4 million and 12 cents per share. Groupon’s operating loss for the quarter was $12.9 million, compared with an operating loss of $15 million in the same quarter a year ago.

Groupon Inc (NASDAQ:GRPN) did report a 24 percent increase in gross billings year over year and a 30 percent increase in consolidated revenue year over year. CEO Andrew Mason called the company’s record billings growth “a clear signal that customers love Groupons.”

Groupon’s first quarter guidance was for revenue to be between $560 and $610 million, although Wall Street’s consensus for the company’s guidance was around $650 million. Groupon also expects operating loss to be around $10 million during the first quarter of 2013.

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