Groupon Profit Tops View, But Shares Down On Weak Q2 Outlook

(RTTNews) - Groupon Inc. (GRPN) Tuesday reported a first-quarter loss that widened from a year ago, despite a 26 percent growth in revenues as higher costs hurt its bottom line. Nonetheless, loss for the quarter was lower than what analysts' estimated, while revenues also trumped expectations.

However, shares of the daily deal website plunged a near six percent in extended-trade, after detailing some weak earnings outlook for the second quarter, as the company continues to increase its investment on growth.

Looking forward to the second quarter, Groupon expects adjusted earnings of breakeven per share and $0.02 per share with revenues between $725 million and $775 million. Analysts polled by Thomson Reuters currently expect earnings of $0.03 per share on revenues of $754.37 million for the second quarter. Analysts' estimates typically exclude one-time items.

The company is in a path of acquisition-based growth and is also splurging on marketing as it attempts to revamp itself from a daily-deal coupon site to a marketplace for multiple deals like Amazon.com. Groupon had acquired Ticket Monster from peer LivingSocial Inc. for $260 million in November and Ideeli Inc. for about $43 million early this year.

Chicago, Illinois-based Groupon's first-quarter loss widened to $37.8 million or $0.06 per share from $4.0 million or $0.01 per share last year.

Excluding one-time items, adjusted loss for the quarter was $0.01 per share. On average, 24 analysts had expected a loss of $0.03 per share for the quarter.

The daily deal website's revenue for the first quarter surged 26 percent to $757.6 million from $601.40 million a year ago. Twenty-four analysts had a consensus revenue estimate of $738.40 million for the first quarter.

Groupon's revenue growth was driven largely by strong performance at North America and EMEA and Rest of World, where revenues grew 27 percent, 26 percent, and 23 percent, respectively.

Gross billings, the total amount collected from customers for goods and services, rose 29 percent to $1.82 billion. Billings in North America increased 15 percent.

Total operating costs rose to $405.7 million from $357.8 million last year, while total cost of revenues increased to $371.9 million from $222.4 million last year.

GRPN closed Tuesday's trading at $6.72, down $0.17 or 2.47%, on the Nasdaq. The stock further slipped $0.40 or 5.95% in after-hours trade.