Groupon Inc reported better-than-expected quarterly profit and revenue on Wednesday as the company's main daily deals business in North America turned in a strong performance.
Shares of Groupon, the world's largest daily deal company, surged 12 percent to $6.24 in after-hours trading.
First-quarter revenue rose to $601.4 million from $559.3 million a year earlier. Groupon was expected to generate revenue of $590 million, according to Thomson Reuters I/B/E/S.
Consolidated segment operating income, or CSOI, a closely watched measure of Groupon's profitability, came in at $51.2 million in the latest period. Mark Mahaney, an analyst at RBC Capital Markets, was expecting CSOI of $26 million.
Everything went better than expected
Groupon's North American revenue jumped 42 percent, while International revenue fell 18 percent.
“Revenues were slightly better than expected, with North America growth lot better, while International is definitely still slower,” said Aaron Kessler, an analyst at Raymond James.
Wall Street was cautious ahead of Groupon results, so the company's “solid” performance triggered a particularly big gain in Groupon shares late on Wednesday, Kessler added.
The company, one of the most feted Internet market debutantes of 2011, fired co-founder and CEO Andrew Mason in February after a string of disappointing results wiped out three-quarters of its market value. Groupon, which has lost several other key executives, is on the lookout for a new permanent chief executive.
Groupon shares hit a record low late last year, but have rallied strongly since then, partly because Tiger Global, a top technology-focused hedge fund firm, took a stake of about 10 percent in the company.
Under interim co-CEOs Eric Lefkofsky and Ted Leonsis, Groupon is trying to turn around its struggling European business, while continuing to expand in the United States. Analysts expect a slimmed-down company under the new leadership.