Daily deals website Groupon Inc forecast a surprise loss for the current quarter as it spends more on marketing, sending its shares down more than 13 per cent in extended trading.
The stock had briefly risen more than 18 per cent in extended trading after the company reported better-than-expected fourth-quarter results helped by strong demand in the holiday season for its business that sells discounted products.
Groupon, which competes with Amazon.com, eBay and Google in a fiercely competitive online marketplace, will spend $25-million on marketing in the current quarter to drive growth, Chief Financial Officer Jason Child told Reuters.
“As we fold in our two new acquisitions, TMON (Ticket Monster) and Ideeli, we are going to be investing $20-million,” Child said.
The company bought rival e-commerce company LivingSocial Inc’s South Korean unit, Ticket Monster, for $260-million in November and Ideeli Inc for about $43-million last month.
Groupon on Thursday forecast an adjusted loss of 2 cents to 4 cents per share, on revenue of $710-million and $760-million for the first quarter ending March.
Analysts on average were expecting a profit of 76 cents per share on revenue of $668.7-million, according to Thomson Reuters I/B/E/S.
The company’s net loss slightly widened to $81.2-million, in the fourth quarter ended Dec. 31, from $81.1-million, a year earlier.
The company posted a loss of 12 cents per share, flat with a year earlier. Excluding items, it earned 4 cents per share in the latest quarter.
Revenue rose 20.4 per cent to $768.4-million.
Analysts on average were expecting earnings of 2 cents per share on revenue of $718-million.
Groupon’s shares were trading down 10.7 per cent at $9.17 in trading after the bell. They closed at $10.279 on the Nasdaq on Thursday.