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Groupon’s Shares Soar 17% on Strong Sales

February 12, 2016, 12:00 AM UTC
Groupon Prepares For $750 Million IPO
CHICAGO, IL - JUNE 10: The Groupon logo is engraved in a glass office partition in the company's international headquarters on June 10, 2011 in Chicago, Illinois. Groupon, a local e-commerce marketplace that connects merchants and consumers by offering goods and services at a discount, announced June 2 that it had filed with the Securities and Exchange Commission for a proposed initial public offering of its Class A common stock. The company, launched in Chicago in November 2008 now markets products and services in 43 countries around the world. (Photo by Scott Olson/Getty Images)
Photograph by Scott Olson — Getty Images

(Reuters) – Groupon reported a higher-than-expected quarterly profit, as strong sales in North America and restructuring of its businesses boosted margins.

The company’s shares (GRPN), which have fallen 70% in the last 12 months, rose 17% in after-hours trading on Thursday.

The company exited 19 markets across the world last year to bolster its North American business.

Groupon has also stepped up its marketing efforts under new CEO Rich Williams, who replaced co-founder Eric Lefkofsky in November.

Gross billings, a key measure reflecting the gross amount collected from customers, rose 10.7% to $1.05 billion in North America, its biggest market.

The holiday shopping weekend was an important contributor to company’s strong quarter, interim CFO Brian Kayman told Reuters.

Groupon said in December its North American billings rose 41% from Black Friday through Cyber Monday.

The company, which unveiled a $150 million to $200 million marketing blitz in November, said the number of active users rose 3% to 48.9 million.

Groupon has also been offloading low-margin businesses such as consumer electronics.

The move helped the company raise its adjusted EBITDA forecast to $80 million-$130 million from $75 million-$125 million for 2016.

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Net loss attributable to Groupon was $46.5 million, or 8 cents per share, in the fourth quarter ended Dec. 31, compared with a profit of $8.8 million, or 1 cent per share, a year earlier.

Excluding items, the company earned 4 cents per share, beating the average analyst estimate of a breakeven on a per-share basis.

Revenue rose 3.8% to $917.2 million, above analysts’ expectations of $845.9 million.