|Groupon stock jumps 25 percent on earnings news |
July 27, 2016
Groupon stock jumped 25 percent in after-hours trading Wednesday after the company reported better-than-expected news from the second quarter.
Chicago-based Groupon (Nasdaq: GRPN) beat analyst estimates on earnings per share and revenue and raised revenue guidance for the year.
Revenue for the quarter was $756 million, up more than 2 percent compared to the second quarter of 2015. Analysts had expected revenue to be $711 million.
And Groupon lost 1 cent per share, beating an expected loss of 2 cents per share, on a loss of $51.7 million.
Groupon earnings were 16 cents a share in the year-ago quarter, when it posted a profit of $109.1 million. It revised revenue guidance for the year to $3.0 to $3.1 billion, up from $2.75 to $3.05 billion.
CEO Rich Williams ? said improved customer acquisition — Groupon added 1.1 million users in the second quarter — and a restructuring program that has the company slimming down abroad and at home contributed to "good consistent progress." He also pointed to improved margins in Groupon's shopping business as a factor in the stock's recent rise.
Groupon shares traded at $4.73 after the close on Wednesday. The stock has enjoyed a recent bump, touching $3.91 earlier this month following an analyst upgrade. But before the after-hours spike Wednesday, it had lost about one-fifth of its value for the year.
The company continues to streamline its business and invest in marketing, including running its first nationwide advertising campaign since 2011 — both key objectives of Williams. He said it is too early to know how the advertising campaign is paying off, but he is happy with how it has been received.
Contrary to recent speculation, Williams said he is not trying to turn Groupon into an acquisition target.
"We're positioning ourselves to build a great business," Williams said. "Trying to build a business for acquisition is a massive distraction, and I think sells our shareholders short and sells the opportunity in local short. It's not what we're doing here at all."