Strong Dollar To Weigh On Groupon's Q3 Results

(RTTNews) - Daily deals site Groupon Inc. (GRPN) expects to report adjusted earnings of $0.00 - $0.02 per share, on revenues of $700 million - $750 million for the third quarter, while analysts are currently looking for earnings of $0.02 per share on revenue of $732.74 million. The results are due to be released after the market close on Tuesday, November 3.

For fiscal 2015, Groupon affirmed its outlook for revenues in a range of $3.15 billion - $3.30 billion. The Street currently expect the company to report revenue of $3.19 billion for 2015.

The outlook for both the third quarter and full year anticipates nearly 600 basis points of unfavorable impact on year-over-year growth rate from changes in foreign exchange rates.

September 22, the company announced its plan to cut about 1,100 jobs globally as part of a restructuring of its international operations. It is expected be substantially complete by September 2016.

The company expects to record total pre-tax charges of up to $35 million, including about $22 million - $24 million in the third quarter of 2015. Substantially all of the pre-tax charges are expected to be paid in cash and will relate to employee severance and compensation benefits, with an immaterial amount of the charges relating to asset impairments and other exit costs.

In addition, the company expects that any cost savings from the restructuring actions will be immaterial in 2015. Cost savings in subsequent years are expected to be primarily reinvested in the business.

In the last quarter, the company reported a turnaround to profit, reflecting higher revenues and lower expenses as well as a gain on sale of the company's stake in its South Korean business. However, adjusted earnings per share missed analysts' expectations, while revenues were impacted by a stronger U.S. dollar.

Second-quarter net income was $109.08 million or $0.16 per share, compared to a loss of $22.88 million or $0.03 per share in the year-ago quarter.

The latest quarter's results include a gain of $0.21 per share on the Ticket Monster sale that offset loss from continuing operations.

Loss from continuing operations for the quarter was $15.27 million or $0.03 per share, wider than the prior year's loss of $10.69 million or $0.02 per share.

Excluding items, adjusted net earnings for the latest quarter was $13.81 million or $0.02 per share. On average, 21 analysts polled by Thomson Reuters expected earnings of $0.03 per share. Analysts' estimates typically exclude certain special items.

Revenue for the quarter rose 3% to $738.40 million from $716.21 million last year. Adjusting for the impact of foreign currency, revenues increased 10%. Analysts were looking for revenue of $740.25 million for the quarter.