Tags: Groupon | Alternatives | Outlook | Short

Groupon Mulls Alternatives as Outlook Falls Short

Thursday, 30 Oct 2014 05:47 PM

Groupon Inc. is exploring alternatives for its international operations after its fourth-quarter forecast missed analysts’ estimates as currency fluctuations cut into profit.

The company said it hired advisers to evaluate financial and strategic options for its businesses outside the U.S. that could unlock shareholder value, citing the growth opportunities for Ticket Monster and the rest of its Asian operations. Chief Executive Officer Eric Lefkofsky said the company is focused on finding partners instead of selling some of the businesses completely.

“We are starting to evaluate what we should be doing in those emerging markets,” Lefkofsky said Thursday in a phone interview. “There are certain countries where we’d benefit from a partner.”

Groupon forecast fourth-quarter earnings of as much as 4 cents a share, excluding some items, saying that “significant movement” in foreign-exchange rates is limiting profit. Analysts were expecting 7 cents a share on average.

The company, which started out by sending daily-deal e-mails, is investing in becoming a full-blown e-commerce site. Lefkofsky is trying to take on the likes of Amazon.com Inc. by transforming Groupon into a website offering thousands of discounts. While Chicago-based Groupon has been adding new features like a grocery loyalty program and listings of local businesses, customers have been slow to embrace the company’s shift.

“We largely delivered on all our objectives,” Lefkofsky said. “I think people will say Groupon has been largely turned around now.”

Groupon reported third-quarter earnings of 3 cent a share, excluding some items, which beat the 1-cent average estimate among analysts. It also topped the company’s own forecast for break-even to 2 cents a share. Sales rose 27 percent to $757.1 million in the quarter, exceeding the $749 million average estimate.

To accelerate growth, Groupon introduced a number of new features in the last few months. It introduced Pages — more than 7 million listings of merchants, complete with their business hours, links to their websites, ratings and helpful tips from customers.

Groupon also updated its iPhone app to include Apple Pay, which lets app users make payments by scanning their fingerprints. Another mobile feature, Snap by Groupon, is a free app that pays people cash for buying select grocery and other items every week from any retailer in the U.S. and Canada.

“They’ve done a lot of investment to try to turn around their business,” Edward Woo, an analyst at Ascendiant Capital Group LLC, said before the results were released.

On the flip side, Groupon has seen its share of executive departures lately. Head of product Parker Barrile left this month after less than two months on the job, the company said. Another executive, Jeff Holden, left Groupon for Uber earlier this year.

Groupon will host its first-ever analyst day on Nov. 11 in Chicago.

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Groupon Inc. is exploring alternatives for its international operations after its fourth-quarter forecast missed analysts' estimates as currency fluctuations cut into profit.
Groupon, Alternatives, Outlook, Short
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2014-47-30
Thursday, 30 Oct 2014 05:47 PM
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