Groupon Inc. (Nasdaq: GRPN) reported Q4 2013 earnings after closing bell today (Thursday). GRPN stock gained 2.69% over the course of the day, but it's plummeted over 12% in after-hours trading, despite beating projections with a record performance in the quarter.
The after-hours stock somersault likely results from a Q1 2014 loss of between $0.02 and $0.04 per share. This loss stems from two very recent January acquisitions (discussed below) pressuring the bottom line with what Groupon identifies as "one-time costs related to their integration." Long term, however, the purchases will ultimately prove profitable if Groupon can manage them well.
Otherwise, Groupon was able to top Wall Street's consensus expectation by $0.02 per share, reporting Q4 earnings per share (EPS) gain of $0.04 gain (compared to a projected EPS of $0.02 per share). It also beat revenue by $50.36 million, coming in at $768.4 million, a 20.4% increase from revenue in the same period a year ago.
For the full year 2013, revenue increased 10% to $2.6 billion, compared with $2.3 billion in 2012.
Strength in "Goods" – tangible items purchased at a discount through Groupon, as opposed to a service or vacation – led today's record quarter performance and is attributed to holiday shoppers purchasing items through Goods to fill their needs.
This is the second time Groupon managed to top Wall Street estimates in the past five quarters – it's also met them twice and missed once.
Groupon's future looks bright as two main numbers today – mobile growth and product diversification – appear promising.
Groupon (Nasdaq: GRPN): Takeaways in Earnings Today
No. 1: Groupon's Mobile Growth
The mobile industry is booming, replacing a slowing PC industry.
More than 56% of Americans are smartphone users, according to Pew Researchin 2013. The number of U.S. mobile coupon users will rise from 12.3 million in 2010 to a projected 53.2 million in 2014, according to eMarketer.
The shift to mobile for online purchases requires Groupon to meet consumers' mobile demand for success.
And so far, it's doing just that.
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