Why a Slight Loss Is Holding Groupon Way Back

By Chris Lange Updated Jan 13, 1:52AM EST · Published Oct 27, 8:40AM EDT

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Why a Slight Loss Is Holding Groupon Way Back — © Thinkstock

Groupon Inc. (NASDAQ: GRPN) released its third-quarter financial results after the markets closed on Wednesday. The company posted a net loss of $0.01 per share and $720.5 million in revenue. The consensus estimates called for a net loss of $0.02 per share on revenue of $707.8 million.

Global units sold declined 5% year-over-year to 49 million, primarily driven by country exits and restructuring efforts in international segments.

Units in North America increased 4%, EMEA units declined 8% and Rest of World units declined 31%.

During the third quarter of 2016, Groupon repurchased 5.2 million shares for an aggregate purchase price of $24.6 million. Nearly $245 million remains available under the current repurchase plan.

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Groupon is raising its revenue guidance range to between $3.075 billion and $3.150 billion for the full year, and narrowing its expected 2016 adjusted EBITDA range to between $150.0 million and $165.0 million.

Consensus estimates call for $748.13 million in revenue for the fourth quarter and $3.1 billion in revenue for the full year.

Operating cash flow for the trailing 12 months ended September 30, 2016, was $78.9 million. Free cash flow was negative $53.7 million in the third quarter. Groupon cash and cash equivalents totaled $689.75 million at the end of the quarter, down from $853.36 million at the end of 2015.

Rich Williams, Groupon CEO, commented:

Our strategy continues to deliver results with double-digit growth in North America local billings and our highest quarter for customer acquisition in over three years. We are looking forward to a strong finish to the year and further progress on our mission to make Groupon a daily habit for consumers.

Shares of Groupon closed Wednesday down 1.1% at $5.26, with a consensus analyst price target of $5.24 and a 52-week trading range of $2.15 to $5.94. Following the release of the earnings report, the stock was down an additional 9% at $4.78 in early trading indications Thursday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.