Groupon Earnings Not Enough for Investors

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Groupon Inc. (NASDAQ: GRPN) reported its most recent quarterly results before the markets opened on Wednesday. The online coupon company posted $0.07 in earnings per share (EPS) and $873.2 million in revenue, versus consensus estimates from Thomson Reuters that called for $0.09 in EPS on revenue of $852.81 million. The fourth quarter of last year reportedly had EPS of $0.07 and $934.88 million in revenue.

Gross billings totaled $1.58 billion in the fourth quarter, down 2%, or 4% on an FX-neutral basis, from $1.61 billion.

During the fourth quarter, North America active customers reached 32.7 million, reflecting the addition of 200,000 net new active customers. At the same time, gross profit for the North America segment increased 6% to $265.0 million year over year.

Internationally, active customers increased by a net of 200,000 reaching a total of 16.8 million at the end of the quarter. Gross profit increased 21%, or 12% on an FX-neutral basis, to $121.9 million.

Looking ahead to the 2018 full year, Groupon expects to see adjusted EBITDA in the range of $260 million to $270 million. The consensus estimates call for $0.20 in EPS on $2.91 billion in revenue for the year.

Operating cash flow was $270.6 million in the quarter, and free cash flow was $255.1 million. On the books, Groupon cash and cash equivalents totaled $880.1 million at the end of the quarter.

CEO Rich Williams commented:

In 2017, we made progress in creating a better customer experience that removed friction for our customers while also maximizing gross profit. We are excited to build on this success in 2018, combining our growing mobile penetration and platform power to ultimately become the daily habit in local commerce for customers and merchants.

Shares of Groupon were last seen down about 11% at $4.62 on Wednesday, with a consensus analyst price target of $5.47 and a 52-week range of $2.90 to $5.99.