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GRPN

SAN FRANCISCO (MarketWatch) -- Groupon Inc.(GRPN) is on tap to deliver its second-quarter earnings reportt after the close of trading Tuesday, with the online daily deal and e-commerce company expected to meet analysts' estimates, but possibly dampen expectations for the third quarter.

Here's what investors can expect:

Earnings: Analysts surveyed by FactSet are expecting Groupon(GRPN) to earn a penny a share, excluding one-time items such as stock-option expenses. During the year-ago period, Groupon(GRPN) earned 2 cents a share.

Revenue: Groupon(GRPN) is expected to report sales of $762 million, which would be a 25% gain over the $608.7 million in sales the company took in a year ago.

Stock reaction: It's probably safe to say that investors aren't too happy with how Groupon's(GRPN) stock price has performed this year. Groupon(GRPN) shares traded at around $6.40 on Friday, and are down more than 45% for the year. And since reaching a 52-week-high of $12.76 a share on Sept. 19, 2013, the shares have fallen almost 50%

Other matters: Groupon(GRPN) has been in transition since firing Andrew Mason from his Chief Executive job in Feb. 2013. The company is focusing more of its efforts on deals and e-commerce to, as Groupon(GRPN) calls it, "pull" in consumers as opposed to pushing out deals that give customers a limited amount of time in which to respond.

"The transition to a "pull" from "push" commerce is expected to temper near-term revenues, along with an increase in marketing costs," said analyst Edward Woo of Ascendiant Capital Markets. "We are not yet convinced that Groupon(GRPN) is on a consistent path towards growth and profitability and believe its share price is likely to remain volatile and weak until it demonstrates it can grow both consistently."

Woo, who has a sell rating and $5-a-share target price on Groupon's(GRPN) stock, added that he believes Groupon(GRPN) will give third-quarter estimates that are below the current consensus outlook for a profit of 5 cents a share on $759 million in revenue.

Arvind Bhatia, of Sterne Agee, said he believes investors will be looking for signs of improvement in three key areas from Groupon(GRPN): revenue growth in local deals, improvement in the company's gross margins for goods and progress in its international operations. Bhatia has a buy rating and $12-a-share target price on Groupon's(GRPN) stock.

-Rex Crum; 415-439-6400; [e-mail]

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08-05-140724ET
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