News Column

Groupon shares fall after hours on outlook

May 6, 2014

CHICAGO (AP) — Groupon Inc. says increased demand helped boost its first-quarter revenue but it widened its loss for the period.

The quarter's results still exceeded market expectations but it gave a weak outlook, which sent its shares down in after-hours trading Tuesday.

Groupon is going through a transition period as it tries to move away from being solely an online deals provider.

The Chicago-based company built its business on emailing daily discount deals for restaurants, spas and nail salons to users and taking a cut of the money businesses make from them. But it is trying to expand beyond that, adding product sales, payments services and other revenue streams, such as its acquisition of online fashion site Ideeli earlier this year.

Groupon reported a loss of $37.8 million, or 6 cents per share, for the quarter. That's compared with a loss of $4 million, or 1 cent per share, last year. On an adjusted basis, it earned 1 cent per share in the most recent period, better than the loss of 3 cents per share that analysts polled by FactSet were anticipating.

Its revenue increased 26 percent to $757.6 million from $601.4 million, also surpassing market forecasts. Analysts had anticipated revenue of $740.1 million.

The company said that worldwide billings, which represent the value of purchases of goods and services but exclude taxes and refunds, increased 29 percent to their highest level ever for the period that ended March 31.

Groupon forecast second-quarter revenue between $725 million and $775 million and adjusted earnings from breakeven to 2 cents per share. Analysts had forecast earnings of 3 cents per share on revenue of $757.6 million.

Investors were disappointed with the weak earnings forecast and sent its shares down 42 cents, a 6 percent decline, to $6.30 in after-hours trading.

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Source: Associated Press

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