A tale of two Internet service firms -- both
) and Groupon (
) reported Q4 earnings after the bell Thursday. While the travel
booking website company put together a healthy beat on the top
and bottom lines, the daily deals firm topped revenue estimates
but was woefully short on earnings, based on charges we accounted
GROUPON INC (GRPN): Free Stock Analysis
PRICELINE.COM (PCLN): Free Stock Analysis
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Analysts had expected Groupon to come close to profitability but
reported EPS of -$0.12 (actual, after stock-based compensation).
The company was shooting for its third consecutive positive
earnings surprise, but it was not to be. Worldwide mobile
transaction mix was up 10% in the quarter, however, and Groupon's
revenues are up 20% year over year.
Priceline, on the other hand, continues to please investors with
beating analyst estimates, as it has done for at least the last
six quarters. Earnings of $8.04 per share beat the Zacks
Consensus Estimate by 5%, and revenues of $1.54 billion in the
quarter topped our expectations of $1.52 billion. Earnings also
rose 25% year over year.
Groupon did give investors some things to look forward to in
2014, however: acquiring Korean e-commerce firm Ticket Monster
and online fashion retailer ideeli should be accretive to
Groupon's business. According to the 12 analysts currently
following the company, 2014 should be its first year of
profitability, at 8 cents per share for the full fiscal year.
Where Groupon saw weakness in the quarter was outside of North
America and Europe: the Rest of World segment was down 11%. Also,
with product head Jeffrey Holden recently having stepped down,
perhaps investors are anticipating some tougher sledding ahead.
Perhaps this is why, after initially trading up in the
after-market, GRPN shares are down over 10%.
No such drama for Priceline; consistency almost always pays off.
Shares of PCLN are up around 1.5% after hours, and now trade at a
pretty hefty $1283.00 per share. Priceline is a Zacks Rank #2
(Buy) stock, and has grown nearly 83% in the past year.