Groupon loss and weak sales clobber shares

(Reuters) – Groupon Inc reported a loss on Wednesday as user growth slowed from the breakneck pace of past quarters, potentially signaling consumer fatigue with daily deals and wiping 13 percent off its shares.

In its first results report since going public, the daily deals company founded by Andrew Mason said it recorded higher taxes overseas that resulted in a net loss, although Wall Street had on average bet on a small profit.

Groupon paid $35 million in taxes during the quarter, for an effective tax rate of 1,600 percent. That was driven by income generated in some countries outside the United States and tax provisions related to Groupon’s new international headquarters in Switzerland.

“This makes us a good corporate citizen,” said Chief Financial Officer Jason Child. But he added that the company’s tax rate in the future will likely be about 33 percent.

Worldwide active users – those who bought a deals coupon, or groupon, within the past 12 months – rose 20 percent quarter-on-quarter to over 33 million at the end of December, the company said.

That marked a 275 percent jump from the same period a year earlier, but analysts said it was lower than expected, while others pointed to a lackluster revenue forecast for the first quarter that suggested flat growth.

“That suggests there are fewer newer customers, consumer fatigue and the impact from lower marketing spending,” said Sameet Sinha, an analyst at B Riley. “That means not enough people are buying groupons.”

Groupon said its fourth-quarter net loss attributable to common stockholders was $42.7 million, or 8 cents a share. That compares with a loss of $378.6 million, or $1.08 a share, a year earlier.

On an adjusted basis, Groupon reported a fourth-quarter loss of 2 cents a share. Revenue was $506.5 million, up 194 percent from the final quarter of 2010.

Groupon was expected to make 3 cents a share profit on revenue of $475 million in the fourth quarter, according to Thomson Reuters I/B/E/S.

The Chicago-based company‘s shares slumped about 13 percent to $21.35 in after-hours trading following the results.

On Wednesday, Groupon forecast revenue of $510 million to $550 million in the first quarter of 2012, a slight increase from 2011’s fourth quarter.

There was “some concern that the guidance looks flattish, sequentially,” said Raymond James’ Aaron Kessler. “Maybe investors are looking for a little bit more growth on a sequential basis.”

(Reporting by Alistair Barr and Gerry Shih in San Francisco, Edwin Chan in Los Angeles; editing by Bernard Orr, Tim Dobbyn Andre Grenon and Matthew Lewis)

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