Groupon (GRPN) Off on Earnings, Weaker Forecast

Shares of Groupon Inc. (GRPN) were off -1.38 or -13.42 percent to $8.90 per share in premarket trading on Friday, after the companyâ s fourth quarter earnings came in better than expected, but forecast weaker earnings for their 2014 fiscal year. Groupon stock closed at $10.28, up +0.26 or +2.58 percent in Thursdayâ s regular trading session.

Chicago, Illinois based Groupon Inc. is an Internet website offering customers discount coupons for national and local businesses. The company makes money by offering discounts for companies and then sharing in the merchantâ s revenue gained from the promotion. Groupon was launched in 2008 by the companyâ s former CEO, Andrew Mason, with their home base Chicago as their first market. Groupon has since expanded into over 150 urban markets in North America and over 100 markets in Europe, South America and Asia. Groupon reported a net loss of -$81.2 million, or -$0.12 per share on revenue of $768.4 million, versus a loss of -$81.1 million or $0.12 per share on revenue of $638.3 million in the same quarter one year ago. On an adjusted basis, with the exclusion of onetime items, Groupon earned $0.04 per share, versus the analyst consensus of $0.02 on revenue of $638.3 million, nevertheless, sales for the same period increased by +20 percent from a year ago. Initially, when the news hit the wire, Groupon stock rallied sharply in afterhours trading, buy sold off once investors saw the companyâ s forecast for its first quarter. Groupon expects to report a loss of -$0.02 to $0.04 per share excluding onetime items, on revenue of $710 million to $760 million. Analysts expected the company to show a +$0.05 profit on $688.3 million in revenue. Most online investors struggled in the fourth quarter, despite Grouponâ s measures to improve its website and expand its mobile applications, the companyâ s marketing costs have steadily increased. The company recently unveiled a new self service feature on their site called â

Published on Feb 21, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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