Groupon (GRPN) Experiences Growing Pains: Q2 Results Mixed as Slowdown Evident; Guidance Lacks Sparkle
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Groupon, Inc. (Nasdaq: GRPN) shares are getting hit in late trading Monday following its second-quarter 2012 results and outlook for the third quarter of 2012.
Revs rose 44.8 percent from $392.58 million up to $568.34 million in the latest quarter. Sales growth in the last quarter was 89 percent and 194 percent in Groupon's fourth-quarter 2011.
Groupon also swung to profit of $28.4 million, or 4 cents per share, from a loss of $107.4 million last year. Adjusting for one-time items, Groupon's EPS was 8 cents in the quarter.
The Street was expecting sales of $576.8 million and EPS of 3 cents. Estimize users expected EPS of 6 cents and revs of $624.6 million.
One important bit from the release which should be noted is the following passage: "The second quarter 2012 was the first quarter that direct revenue, or the amount earned from the sale of products for which the Company is the merchant of record, was material to Groupon’s overall performance. Accordingly, the Company’s consolidated revenue presentation now includes third-party revenue, which is related to sales for which the Company acts as an agent for the merchant, as well as direct revenue. Third-party and direct revenues are recorded on a net and gross basis, respectively. Direct revenue was $65.4 million in the quarter, compared with $19.2 million in the first quarter 2012."
Costs related to customer acquisitions fell 43 percent, with Groupon saying marketing spend fell 58 percent.
"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," commented CEO Andrew Mason.
Looking ahead, Groupon sees third-quarter revs of $580 million to $620 million and operating income of $15 million to $35 million. Operating income compares with $46.49 million reported in the second-quarter 2012 and a loss of $0.2 million in the same period last year. The Street was modeling revs of $604.5 million.
Shares of Groupon are down over 17 percent in late trading Monday.
Revs rose 44.8 percent from $392.58 million up to $568.34 million in the latest quarter. Sales growth in the last quarter was 89 percent and 194 percent in Groupon's fourth-quarter 2011.
Groupon also swung to profit of $28.4 million, or 4 cents per share, from a loss of $107.4 million last year. Adjusting for one-time items, Groupon's EPS was 8 cents in the quarter.
The Street was expecting sales of $576.8 million and EPS of 3 cents. Estimize users expected EPS of 6 cents and revs of $624.6 million.
One important bit from the release which should be noted is the following passage: "The second quarter 2012 was the first quarter that direct revenue, or the amount earned from the sale of products for which the Company is the merchant of record, was material to Groupon’s overall performance. Accordingly, the Company’s consolidated revenue presentation now includes third-party revenue, which is related to sales for which the Company acts as an agent for the merchant, as well as direct revenue. Third-party and direct revenues are recorded on a net and gross basis, respectively. Direct revenue was $65.4 million in the quarter, compared with $19.2 million in the first quarter 2012."
Costs related to customer acquisitions fell 43 percent, with Groupon saying marketing spend fell 58 percent.
"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," commented CEO Andrew Mason.
Looking ahead, Groupon sees third-quarter revs of $580 million to $620 million and operating income of $15 million to $35 million. Operating income compares with $46.49 million reported in the second-quarter 2012 and a loss of $0.2 million in the same period last year. The Street was modeling revs of $604.5 million.
Shares of Groupon are down over 17 percent in late trading Monday.
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