Groupon Shares Soar After Revenue Beats Forecasts

Groupon
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Groupon reported first-quarter earnings Wednesday that met analysts' expectations, while revenue beat, as the company's main daily deals business in North America turned in a strong performance.

The online daily deal company's shares soared more than 15 percent following the news. What is Groupon's stock doing now? (Click here for the latest after-hours quote.)

Revenue improved 8 percent to $601.4 million from $559.3 million in the year-earlier period.

Earnings excluding items rose to 3 cents per share from 2 cents a share a year ago.

Analysts had expected the company to report earnings excluding items of 3 cents a share on $590 million in revenue, according to a consensus estimate from Thomson Reuters.

Consolidated segment operating income, or CSOI, a closely watched measure of Groupon's profitability, came in at $51.2 million in the latest period. Mark Mahaney, an analyst at RBC Capital Markets, was expecting CSOI of $26 million.

Groupon's North American revenue jumped 42 percent, while international revenue fell 18 percent.

"Revenues were slightly better than expected, with North America growth lot better, while International is definitely still slower," said Aaron Kessler, an analyst at Raymond James.

For the second quarter, Groupon said it expects revenue of $575 million to $625 million. Analysts currently expect $616 million, according to Thomson Reuters.

Wall Street was cautious ahead of Groupon results, so the company's "solid" performance triggered a particularly big gain in Groupon shares late on Wednesday, Kessler added.

The company, one of the most feted Internet market debutantes of 2011, fired co-founder and CEO Andrew Mason in February after a string of disappointing results wiped out three-quarters of its market value. Groupon, which has lost several other key executives, is on the lookout for a new permanent chief executive.

Groupon shares hit a record low late last year, but have rallied strongly since then, partly because Tiger Global, a top technology-focused hedge fund firm, took a stake of about 10 percent in the company.

Under interim co-CEOs Eric Lefkofsky and Ted Leonsis, Groupon is trying to turn around its struggling European business, while continuing to expand in the United States. Analysts expect a slimmed-down company under the new leadership.

"We had record mobile performance as 45 percent of our North American transactions came from mobile in March," said Lefkofsky in a press release. "And more than 7 million people downloaded our apps in the quarter."