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Groupon Rises on Impressive Quarterly Earnings

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Stock rose 8.4% last week

Shares of Internet (FDN) stock Groupon (GRPN) rose 8.4% in the last week ended August 4, 2017, to close at $4.12. Groupon is now trading 42% above its 52-week low of $2.90 and 30% below its 52-week high of $5.94. Groupon stock rose more than 10% on August 2, 2017, after the company announced its 2Q17 results.

Groupon reported revenues of $662.6 million with non-GAAP[1. generally accepted accounting principles] EPS (earnings per share) of $0.02 in 2Q17. Analysts expected revenues of $670 million and EPS of $0.00 from Groupon in 2Q17. While Groupon’s revenues came in 1.1% below estimates, its EPS beat estimates by 20% in the quarter ended June 30, 2017.

In 2Q17, Groupon added over 300,000 new active customers in North America, leading to more than 31.9 million active customers in this region.

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Focus on improving profits

Groupon’s management stated that it plans to focus on improving profitability even if it means foregoing revenue growth. Groupon’s management stated, “Our focus is to maximize gross profit, which may come at the expense of revenue. This emphasis includes an increasing shift toward offerings in our higher margin, more differentiated Local category, from our Goods category.”

Analysts expect Groupon’s revenues to fall 10.5% YoY to ~$644.6 million in 3Q17 and 5.5% YoY to ~$883.5 million in 4Q17. This indicates an 8.8% YoY fall in revenues for Groupon in fiscal 2017.

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