Groupon Gets Crushed on Q4 Numbers

Andrew Klips |

Shares of Groupon, Inc. (GRPN) closed the regular trading session ahead by almost 8 percent, but are getting leveled in after-hours action after the daily deals company posted a larger-than-expected net loss in the fourth quarter and whiffed on revenue to boot.

The Chicago-based company reported consolidated revenue of $638.3 million, up 30 percent from the year prior quarter’s $492.2 million, but just shy of analyst predictions of $640.2 million.

On a GAAP-basis, Groupon posted a net loss of $81.1 million, or 12 cents per share.  Wall Street anticipated a GAAP net loss, but only 2 cents per share. GAAP net loss in the year prior quarter was totaled $65.4 million, which was also 12 cents a share, the result of having about 127 million less shares outstanding at the time.

The earnings statement highlighted some positives, including gross billings, or the total value of goods purchased, less taxes and estimated refunds, which increased 24 percent to $1.52 billion compared to the year earlier quarter’s $1.23 billion.  Not counting negative impact of currency exchange rates, gross billings increased 25 percent over Q4 2011.

"Record billings growth this quarter is a clear signal that customers love Groupons," said Andrew Mason, CEO of Groupon. "We will continue to invest in growth through 2013 as we see new opportunities to give our customers what they want."

International sales were a primary culprit in stubborn growth, with revenue dropping 15.9 percent year-over-year in the fourth quarter to $263.0 million from $312.5 million.  Sales in North America were fueled by Groupon’s direct revenue operations, which is largely Groupon Goods (a service that helps companies sell discounted items through multi-day sales).  North American revenue grew 108.9 percent to $375.4 million from $179.6 million the year earlier.

For all of 2012, gross billings increased 35 percent year-over-year to $5.38 billion in 2012, compared with $3.99 billion in 2011. Excluding the $183.5 million negative impact of foreign exchange rates, gross billings were 40 percent higher than 2011.  Consolidated revenue for the whole year increased 45 percent to $2.33 billion from $1.61 billion in 2011.

Net loss attributable to common stockholders improved to $67.4 million, or 10 cents per share from a net loss of $373.5 million, or $1.03 per share in 2011, including stock-based compensation and acquisition-related expenses of $89.1 million.

Looking forward, Groupon sees earnings in the first quarter between a net loss of $10 million and a net gain of $10 million, including $30 million in stock based compensation.  Revenue is expected to be in the range of $560 million to $610 million in the first quarter.

Wall Street was expecting sales outlook around $647 million.

Shares got pummeled after Groupon’s third quarter earnings miss and are getting walloped again this evening with the fourth quarter results.  Shares closed the regular session at $5.98, but have plunged to around $4.50 in extended hours, representing a loss of about 25 percent and the lowest level for the stock in more than two months.  The stock has lost about 75 percent of its value in the last year and more than 80 percent since its IPO in November 2011.

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