Groupon

Groupon loss and weak sales clobber shares

Groupon Inc reported a loss on Wednesday as user growth slowed from the breakneck pace of past quarters, potentially signaling consumer fatigue with daily deals and wiping 13% off its shares.

In its first results report since going public, the daily deals company founded by Andrew Mason said it recorded higher taxes overseas that resulted in a net loss, although Wall Street had on average bet on a small profit.

Groupon paid $35m in taxes during the quarter, for an effective tax rate of 1,600%. That was driven by income generated in some countries outside the United States and tax provisions related to Groupon's new international headquarters in Switzerland.

"This makes us a good corporate citizen," said Chief Financial Officer Jason Child. But he added that the company's tax rate in the future will likely be about 33%.

Worldwide active users - those who bought a deals coupon, or groupon, within the past 12 months - rose 20% quarter-on-quarter to over 33 million at the end of December, the company said.

That marked a 275% jump from the same period a year earlier, but analysts said it was lower than expected, while others pointed to a lackluster revenue forecast for the first quarter that suggested flat growth.

"That suggests there are fewer newer customers, consumer fatigue and the impact from lower marketing spending," said Sameet Sinha, an analyst at B Riley. "That means not enough people are buying groupons."

Groupon said its fourth-quarter net loss attributable to common stockholders was $42.7m, or 8 cents a share. That compares with a loss of $378.6m, or $1.08 a share, a year earlier.

On an adjusted basis, Groupon reported a fourth-quarter loss of 2 cents a share. Revenue was $506.5m, up 194% from the final quarter of 2010.

Groupon was expected to make 3 cents a share profit on revenue of $475m in the fourth quarter, according to Thomson Reuters I/B/E/S.

The Chicago-based company's shares slumped about 13% to $21.35 in after-hours trading following the results.

On Wednesday, Groupon forecast revenue of $510m to $550m in the first quarter of 2012, a slight increase from 2011's fourth quarter.

There was "some concern that the guidance looks flattish, sequentially," said Raymond James' Aaron Kessler. "Maybe investors are looking for a little bit more growth on a sequential basis."

(Published by Reuters - February 8, 2012)

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