Ahead of the Bell: Groupon to post 4Q results

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NEW YORK (AP) — Investors will get their first glimpse at Groupon as a publicly traded company Wednesday when it reports fourth-quarter earnings after the closing bell.

Groupon, which went public in November, makes money by taking a cut from online deals it offers from toysellers and restaurants, massage specialists, cruise lines and just about any other type of business or service.

Wall Street is looking for earnings of 3 cents per share on revenue of $473 million, according to a poll of analysts done by FactSet.

Citi Investment Research analyst Mark Mahaney expects slightly higher revenue of $479 million and adjusted earnings of 5 cents per share. He’s also expecting Groupon to end the quarter with more than 31 million active subscribers — up nearly fourfold, or 251 percent, from a year earlier. He expects each person to spend about $15 per month, down 28 percent year-over-year.

“While the growth in Groupon’s customer base remains impressive, declines in its very high growth rates are inevitable as the law of large numbers catches up,” Mahaney wrote in a note to investors. “The decline in average spend is a function, we believe, of the ongoing very rapid consumer adoption of the service.”

Mahaney said he does not expect the Chicago company to give detailed guidance for the current quarter or for the full year. But he does think that Groupon will give overall commentary related to the weak economy in the U.S. and Europe, as well as trends in the overall online deals market.

The analyst rates Groupon’s stock “Neutral” with a target price of $24.

Shares of Groupon Inc. closed at $24.19 Tuesday, up 21 percent from the initial pricing three months ago.