This article was originally published by GuruFocus
By Sarfaraz A. Khan, Research assistant: Gohar Yousuf
Groupon (GRPN) has recently
released its quarterly results in
which it managed to beat market’s estimates, but the company’s shares are down
26% this year. Moreover, RBC and Credit Suisse have exacerbated the situation
by downgrading the
stock. Despite the pessimism, there were several positives in Groupon’s earnings.
In the final quarter of
2013, Groupon’s revenues increased 20.4% from the previous year to $768.4
million, which was better than analysts’ expectations of $718 million. The business swung
from an operating loss of $12.86 million in fourth quarter 2012 to an operating
profit of $13.35 million. Groupon, however, still posted a net loss of $81.2
million, or $0.12 per share, which is flat from the prior year’s results.
Excluding one-off items, this translated into adjusted profit of $0.04 per
share, which was also above analysts' estimate of $0.02 per share.
Turnaround in EMEA Region
In
North America, the company’s revenues climbed 18.2% to $443 million while in
EMEA region, it recorded growth of 42.5% to $251 million. This solid growth
easily offset the 15.2% decline in revenues from the rest of the world to $73.4
million.
During the previous
quarter, Groupon witnessed 5% year-over-year growth in worldwide gross billing
to $1.6 billion. Gross billings reflect the total amount collected from
customers and is one of the key metrics to determine the growth of the company.
Compared to the previous quarter, the gross billings growth in North America ... read full article at GuruFocus
