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Groupon (GRPN) Shares Slump Despite Earnings Beat - Stocks in the News

Groupon Inc ( GRPN ), struggling to transform its new business strategy into profits, reported fourth-quarter earnings Thursday that beat Wall Street estimates but underwhelmed investors.

Net income at the Internet retailer rose to an adjusted 6 cents per share from a loss of $81.2 million, or 12 cents per share, a year earlier. That beat the 3 cents per share projected by the Zacks Consensus Estimate.

Revenues rose 20 percent, to $925.4 million from $768.4 million in the fourth quarter of 2013. That topped analyst estimates of $908.64 million.

"2014 was a transformational year for Groupon, as we made significant progress in our strategy to become the world's leading local commerce destination," Eric Lefkofsky, CEO of Groupon, said in a press release. "Global billing hit their highest level ever in the quarter," he said, and the 2015 focus will shift to further building Groupon's core marketplace and enhancing user experience.

Bottom Line

Despite some improving numbers, Chicago-based Groupon has struggled to attain sustainable growth. Both traffic and units sold continue to increase, but earnings projections have failed to convince investors that faster growth is on the horizon.

The number of vouchers and products sold before cancellations and refunds exceed 100 million for the first quarter ever. Monthly unique visitors topped 160 million globally by the end of 2014 and 110 million people have downloaded Groupon apps worldwide.

Investors, however, are more concerned about the company's ability to grow profits. Management expects earnings of zero to 2 cents in the current quarter, just touching the 2 cents expected by analysts.

Shares fell nearly 3 percent in after-hours trading, trading around $7.24. Groupon currently has a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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