Kyle
Groupon’s stock has fallen nearly 16 percent in after hours trading after they released their third quarter earnings earlier today when the market closed.
Groupon took a small loss when higher revenue failed to compensate for stock compensation and other expenses. Groupon’s revenue grew by a third but still failed to meet Wall Street’s expectations.
The net loss for the quarter ending in September 2012 was $3 million dollars, basically a breakeven per share. That’s sharply down from the $54.2 million dollar loss or 18 cents per share the same quarter last year. Adjusted earnings of 3 cents per share matched Wall Street’s expectations.
Total revenue was up at $569 million but fell short of Wall Street’s $591 million expectation. Groupon is forecasting revenue between $625 million and $675 million in the fourth quarter. If they come in at the median point of $650 million they will beat analyst’s expectations of $634.9 million.
Analysts and investors are concerned over the long term viability of Groupon’s business model. Many are concerned about “daily deals” as a whole.
There have been wide spread reports across many websites and technology journals, about mom and pop businesses who’ve taken major losses in trying to use Groupon to gain more customers. The general consensus is that small businesses take a loss on their initial Groupon deal and then the customers never come back.
Other entrepreneurs, startup founders, and investors are looking to the loyalty and rewards space, over the daily deals space to increase revenue and keep customers coming back.
Linkage:
