Groupon Profit Tops Estimate; Stock Up

(RTTNews) - Daily deals site Groupon Inc (GRPN) Thursday reported a wider loss for the third quarter, hurt mainly by stock-compensation expense and other costs that offset a double-digit growth in revenues. Nonetheless, both adjusted earnings and revenue for the quarter topped Wall Street estimates.

The company detailed some weak guidance for the fourth quarter, but exuded confidence on becoming a strong mobile commerce player. Groupon shares gained more than 4 percent in after-hours trade on the Nasdaq, following the announcement of results.

"We had another record quarter, with worldwide billings increasing 39 percent and reaching their highest level ever," said Eric Lefkofsky, Groupon chief executive officer. "We also made significant progress in our strategy to become the leading mobile commerce destination."

Groupon informs consumers of deals of the day via emails. But the company faces strong competition, and to move ahead, is vying to be an e-commerce site like Amazon.com.

But such a process entails increased costs as Groupon needs to boost its digital infrastructure, including on the mobile space, and ramp up its team. Early October, Groupon unveiled Snap, a new app specifically for giving customers cash back when they buy certain items at the grocery store.

Groupon, based in Chicago, Illinois, posted a third-quarter net loss of $21.2 million or $0.03 per share, compared with a loss of $2.6 million or $0.00 per share last year.

Excluding items, adjusted earnings for the quarter were $0.03 per share. On average, 22 analysts polled by Thomson Reuters estimated earnings of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.

Results for the quarter include $18.6 million of non-operating foreign currency losses and a $7.7 million decrease in liabilities for uncertain tax positions.

Revenues for the third quarter climbed 27.2 percent to $757 million from $595 million in the prior year. Twenty-three analysts had a consensus revenue estimate of $748.8 million for the quarter.

Among regions, revenue in North America rose 16 percent from last year, Europe, Middle East and Africa gained 56 percent, and rest of the world was up 26 percent.

Gross billings - the amount collected from customers for goods and services - rose 39 percent to $1.86 billion.

Groupon acquired Ticket Monster from peer LivingSocial Inc for $260 million in November 2013. Groupon said that as growth opportunities exist for Ticket Monster, and broadly for the Asian business, it has hired financial advisers to evaluate financing and strategic alternatives for those businesses that would unlock shareholder value.

Results for the third quarter were hurt by operating costs that climbed to $385.6 million from $345.8 million last year.

For the fourth quarter, Groupon expects adjusted earnings of $0.02 to $0.04 per share on revenues of $875 million to $925 million. Analysts currently expect earnings of $0.07 per share on revenues of $926.3 million.

Groupon closed Thursday at $5.99, up $0.20 or 3.45%, on a volume of 28.4 million shares. In after hours, the stock gained : $0.25 or 4.17% at $6.24.