Groupon Earnings Report Disappoints Investors

Groupon was expected to show a profit in its first earnings report since going public last fall. Instead, the company booked a net loss of about eight cents a share last quarter. But Groupon's revenues nearly tripled compared to a year earlier. Wall Street was still disappointed that growth— especially of new customers— wasn't stronger.

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And the daily deal website, Groupon, is all about discounts. It's known for offering deep discounts on local businesses, like restaurants, hotels and other services. The company's own share price was heavily discounted yesterday. Groupon announced big losses. That disappointed investors and its shares tumbled.

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NPR's Annie Baxter has more.

ANNIE BAXTER, BYLINE: Groupon was expected to show a profit in its first earnings report since going public last fall. Instead, the company booked a net loss of about eight cents a share last quarter. But Groupon's revenues nearly tripled compared to a year earlier. Wall Street was still disappointed that growth - especially of new customers - wasn't stronger. Groupon's share price tumbled in after hours trading. Still, Groupon chief financial officer Jason Child told investors on a conference call, that he sees good things ahead - in all 87 countries where the company does business.

JASON CHILD: All the regions and all the countries, you know, should be profitable in next year or two.

BAXTER: That promise of no, really, it'll happen soon is actually encouraging to analyst Karsten Weide with the International Data Corporation.

KARSTEN WEIDE: What this proves is that at least we know now that it's not a Ponzi scheme. It's a viable business.

BAXTER: Weide says Groupon had kind of looked like a Ponzi scheme because it was putting tons of money into marketing to attract more customers and grow revenues, which they then spent on more marketing. Some feared that was unsustainable and Groupon would eventually collapse. Weide thinks that worry has passed. But...

WEIDE: The next question is: how much of a business it can be?

BAXTER: At this point, they've come farther than he expected.

Annie Baxter, NPR News.

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