Groupon Shares Clipped on Revenue Miss (GRPN)

Groupon Inc. (NASDAQ: GRPN) reported second quarter adjusted EPS of $0.08 and $568.3 million in revenues after markets closed today. This marks the third quarter of results for the web coupon company. The results compare to the Thomson Reuters consensus estimates for EPS of $0.03 and $573.1 million in revenue.

For the third quarter the company expects revenue to rise 35%-44% year-over-year to $580-$620 million. The current consensus estimate calls for revenues of $604.5 million. Groupon also noted operating income expectations:

Income from operations for the third quarter 2012 is expected to be between $15 million and $35 million, compared with a loss from operations of $0.2 million in the third quarter 2011. This outlook includes approximately $30 million of stock-based compensation. The outlook further assumes no acquisitions or investments, or material changes in foreign exchange rates.

The company’s CEO said:

We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure. We’ve deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce.

Groupon claims 38 million active customers as of June 30th, up 65% year-over-year, and also said that the coupon site featured more than 100,000 unique merchants for the second straight quarter.

We noted earlier today that 55 million Groupon shares were short, about 27% of the company’s float, and that short covering was undoubtedly helping the share price today. Well, it looks like the shorts knew what they were doing. The revenue miss is hammering shares in after-hours trading.

Shares are down about -13% in after-hours trading, at $6.53. The current 52-week range is $6.35-$31.14. Thomson Reuters had a consensus analyst price target of $17.14 before today’s results were announced.

Paul Ausick