Groupon (Nasdaq: GRPN) Earnings Update: Record-Breaking Quarter, and Promising Future on these Two Numbers

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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Today's earnings report shows that in December 2013, nearly 50% of Groupon's global transactions were completed on mobile devices.

In fact, nearly 70 million people have now downloaded Groupon mobile apps worldwide, with approximately 9 million people downloading them in the fourth quarter alone. That growth is right on track with Q3 2013, in which 9 million users downloaded it as well.

"Our mobile business continued to gain momentum as our worldwide mobile transaction mix increased more than 10% in the quarter, to nearly 50% in December," Groupon Chief Executive Officer Eric Lefkofsky said today alongside earnings release. "With another 9 million downloads this quarter, we now have nearly 70 million app downloads to date."

In an earlier press release, Groupon said that over the holiday weekend that spanned four days, more than 55% of transactions in North America were completed on mobile devices - billings increased 30% compared to the same period in 2012.

No. 2: Efforts to Diversify

On Jan. 2, Groupon announced it purchased Korean e-commerce company Ticket Monster from competitor LivingSocial for $260 million.

The acquisition is intended to strengthen waning revenue growth rates and to help Groupon's international expansion - the online coupon market is worth $4 billion annually in North America, compared to $28 billion annually across globe in total.

Quickly thereafter, on Jan. 13, Groupon acquired flash fashion retailer ideeli for $43 million. The purchase was GRPN's first major move into the fashion category and is a step towards developing more diversified products that are beyond simply offering a daily deal to consumers.

"We're also excited to welcome Ticket Monster and ideeli to the Groupon family," Lefkofsky said today. "The acquisitions bring scale, relationships, and category expertise, making Groupon an even better place to start when you want to do or buy just about anything, anytime, anywhere."

Groupon shares presently sit at $10.29, but are down 11.37% after-hours as of 5:25 p.m. EST. Over the last year, Groupon stock is up 82.83%, but it's down a little over 13% since the New Year.

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