Groupon’s Q3 Results Fall Short of Analyst Expectations

Groupon reported that third-quarter revenue totaled $568.6 million, marking a 32 percent increase year over year. The company also said it broke even, representing a massive improvement over the previous year’s quarter, when it lost 18 cents a share.

However, the results were not good enough to beat analyst forecasts. Analysts, on average, were expecting the Chicago-based daily deals company to deliver revenue of $591 million. Update: The company did meet guidance based on an earnings per share basis. Groupon recorded a profit, excluding some results, of three cents a share to come in line with estimates.

Some may also consider the company’s fourth-quarter guidance a little light, which includes a wide range of potential results. Revenue during the busy holiday period is expected to range between $625 million and $675 million, Groupon said. The company is also predicting income from operations to either break even or produce a profit of $20 million. On average, analysts are expecting revenues to fall near the mid-point at $634 million.

In after-hours trading, the company’s stock plunged 15 percent, or 59 cents a share, to trade at $3.33 — a new low. Last week, Groupon’s stock nose-dived to $3.89 a share, nearly a year after selling shares at $20 apiece in its public offering.

Generally, analysts are concerned about the company’s ability to continue growing its high-margin daily deals business. Last quarter, concern arose from the company’s fast-growing products business, which represents much lower margins. In the release today, Groupon said its Goods category reached an annual run rate of nearly $1.5 billion in global billings and nearly $500 million in revenue shortly after its one-year anniversary.

Indeed, the company’s consecutive growth rates are not as impressive as the yearly results. Last quarter, Groupon reported adjusted earnings per share of 8 cents, excluding some items, on revenue of $568.3 million.

The company’s third-quarter conference call is coming up at 2 pm PT.


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