Groupon's stock is down over 20 percent in after-hours trading after it released an earnings report showing it a loss $81 million last quarter, losing 12 cents per share instead of the 3-cent profit analysts expected. Not only was the last quarter bad, but also it gave a dismal forecast for the first quarter of this year, projecting revenue between $560 million and $610 million, lower than the analyst consensus of $650 million, according to Thomson Reuters. It's been clear for a while that the daily deals bubble has been deflating for a while, and the Groupon results may have convinced investors, too. "This raises questions about how these guys are going to be able to scale the business," Tom White, an analyst at Macquarie told The Chicago Tribune. "The forecast is underwhelming."
While Groupon and Living Social have been notable survivors of the daily deals mania, both companies have had a hard time financially. LivingSocial lost about $650 million last year and has had to layoff people. Groupon let some people go last fall as well, with executives signaling that more are coming in this afternoon's earnings call. Groupon, of late, had won back some of its lost stock price from last year. But, this earnings miss shows the company hasn't been able to sustain that.
This article is from the archive of our partner The Wire.