Groupon slammed 20% in after-hours on earnings miss

Groupon comes in well below estimates and blames it on Europe

More bad news for Groupon stockholders.  The company released its second quarter 2012 results and they’re not good.  The company missed revenue estimates by a pretty wide margin, with $568.3 million in revenue when the Street consensus was anticipating $578 million.  Citi’s Mark Mahaney even predicted as much as $583 million in net revenue. 

Groupon stock dropped 20% in after-hours trading to $6.06, from $7.55 at the close.

Anticipating the backlash, Groupon explained that year-over-year changes in foreign exchange rates had a negative impact to the tune of $32.4 million on the company’s revenue last quarter, which was 45% higher than the same quarter last year ($392.6 million), but would have been 53% higher.

Gross billings—the total amount that Groupon collects from users, which includes the merchant’s cut—also came up short at $1.29 billion, while Citi was anticipating $1.45 billion.  While that’s a 38% increase over the same quarter last year ($929.2 million), the company says it would’ve seen 47% growth in gross billings had it not been for the changes in foreign exchange rates.

"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," said CEO Andrew Mason in a statement. "We've deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce."

Mark Mahaney noted in a Citi Research note that in a survey of merchants, Groupon remains the top choice among businesses considering running a daily deal.  Groupon’s overall market share has increased and merchants’ plans to run a daily deal through Groupon remains high.  In a survey of consumers, Citi found that new product adoption and awareness has increased since last year, with 14% of Groupon customers having bought a Groupon Goods deal last quarter, compared to 0% a year ago.

Of course, Groupon isn’t the only company that has missed expectations.  The economic tumult in Europe has cast a gloomy haze over the earnings reports of several companies—even Apple, which had a surprise miss last month when it came in with $35 billion while analysts were expecting $37 billion.

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