Groupon Loss Widens, Revenue Misses; Stock Sharply Down

(RTTNews) - Daily deals site Groupon Inc (GRPN) Tuesday reported a loss for the second quarter that widened from a year ago, despite double-digit revenue growth hurt by costs as it tries to mold into a e-commerce site and more effectively take on rivals.

Excluding one-time items, Groupon posted a profit that was in line with Wall Street estimates, even as revenue missed expectations.

Groupon provided some weak guidance for the third quarter, sending Groupon shares plummeting 17 percent in after-hours trade on the Nasdaq.

Groupon informs consumers of deals of the day via emails. But this space has been under pressure with rivals entering the fray, and to stay relevant, Groupon has tried to transit into an e-commerce site like Amazon.com. That means more expenses as Groupon beefs up its mobile and online features and expands its team.

For the second quarter, Groupon, based in Chicago, Illinois, posted a net loss of $22.9 million or $0.03 per share, compared with a loss of $7.6 million or $0.01 per share last year.

Excluding items, adjusted earnings for the quarter were $0.01 per share, compared with $0.02 per share a year ago.

On average, 21 analysts polled by Thomson Reuters expected earnings of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the second quarter climbed about 24 percent to $751.6 million from $608.8 million in the prior year. Twenty-two analysts had a consensus revenue estimate of $761.8 million for the quarter.

Among regions, revenue in North America increased more than 12 percent from last year, EMEA surged 42 percent, and rest of the world was up 39.6 percent.

Gross billings - the amount collected from customers for goods and services - climbed about 29 percent to $1.82 billion. Billings increased partly due to acquisitions. Groupon acquired Ticket Monster from peer LivingSocial Inc for $260 million in November and Ideeli Inc for about $43 million early this year.

Results for the quarter were hurt by operating costs that climbed to $397.7 million from $357 million last year, with cost of revenue increasing to $361.7 million from $224 million a year ago.

During the quarter, Groupon repurchased about 17.23 million shares at an average price of $6.15 per share.

For the third quarter, Groupon expects adjusted earnings of $0.00 to $0.02 per share and revenue of $720 million to $770 million. Analysts expect earnings of $0.03 per share on revenue of $760.6 million.

Groupon stock closed Tuesday at $7.07, up $0.05 or 0.70%, on a volume of 44.4 million shares. In after hours, the stock dropped $1.22 or 17.24%, trading at $5.85.