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Groupon loss disappoints Wall Street

Website had been expected to return to profit, but posted a £27m fourth-quarter loss in its first set of results

Groupon, the daily deals website, has disappointed Wall Street expectations of a return to profit by reporting a m (£27m) fourth-quarter loss in its first set of results since joining the stock market late last year.

The Chicago-based company watched its shares crash 8.5% to .50 in after-hours trading after it emerged that a drive to cut costs prior to going public last November had failed to eliminate losses.

Analysts had hoped for a profit of three cents a share after Groupon cut marketing budgets, but it reported a net loss of 8 cents a share for the final quarter of 2011.

However, revenues beat forecasts, up 194% to 6.5m in the three months to 31 December, from 2m in the same period the year before. An uplift in trading, propelled by international expansion, meant Groupon comfortably beat Wall Street’s revenue predictions of 5m.

International revenues of 1m for the full year now account for 60% of total income, and the company did succeed in making its first operating profit since international operations began in the second quarter of 2010, registering a modest m gain compared with 6m of losses a year ago.

Chief executive and cofounder Andrew Mason said Groupon had saved its customers billions of dollars and would continue to invest in new services.

Annual revenues now total .6bn, up from 3m in 2010, and Groupon had 33 million active customers – those who have bought from the website in the past 12 months – at the last count, up 20% quarter on quarter. Some 26 million people have downloaded its mobile phone app.

But after Wednesday’s maiden results, Groupon shares are in danger of crashing once more below their IPO price. The company raised 0m in what was the largest internet company IPO since Google’s .7bn debut in 2004, although the record was overtaken by games group Zynga which sold bn of stock in its December offering.

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