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Grubhub's stock whipsawed after posting a wider-than-expected quarterly loss

Heidi Chung

Grubhub (GRUB) on Wednesday reported a wider-than-expected loss in a mixed fourth quarter earnings report, yet its shares were whipsawed in volatile after-hours trading.

Here were the main numbers for Grubhub’s fourth quarter, compared to Bloomberg estimates:

  • Revenue: $341.3 million vs. $325.93 million expected

  • Adj. EPS loss: 5 cents vs. 3 cents expected

The food delivery company had 22.6 million active diners during the quarter, and gross food sales totaled $1.6 billion. Analysts were expecting 22.2 million active diners and $1.46 billion in gross food sales.

Meanwhile, daily average grubs rose 8% from last year to 502,600, which was better than Wall Street estimates for 480,280. Investors initially sent the stock down 1%, before reversing some of those losses in choppy post-market action.

"We strengthened both sides of our marketplace during the fourth quarter, adding 1.4 million active diners and more than doubling our restaurant selection from just a quarter ago," Grubhub founder and CEO Matt Maloney said in a statement.

"We are making good progress on the key initiatives we outlined last quarter. We added more than 15,000 partnered and over 150,000 non-partnered restaurant options for our diners and we also launched a number of new loyalty programs for our restaurant partners,” he added.

Grubhub sign posted in the ground near some local businesses in Humble, TX.

Revenue guidance for Grubhub was in-line with Wall Street estimates. For the first quarter, the company expects between $350 million to $370 million, and for 2020 revenue is projected between $1.4 billion to $1.5 billion.

Analysts were expecting first quarter revenue of $364.9 million, and full-year revenue of $1.46 billion.

"We remain confident our overall strategy will deliver sustainable value for all of our stakeholders and the team is determined to continue to execute and build on the early wins,” Grubhub CFO Adam DeWitt said.

Grubhub’s investors have had a tumultuous time recently, ever since the company’s management gave dismal guidance in late October that cited slower-than-expected growth and increased competition in the delivery space.

“We believe online diners are becoming more promiscuous,” the the company said in a letter to shareholders at the time.

“For years, we saw in our data that a Grubhub diner was extremely loyal to our platform. However, our newer diners are increasingly coming to us already having ordered on a competing online platform, and our existing diners are increasingly ordering from multiple platforms,” it added. The weak guidance and commentary sent Grubhub stock reeling 40%.

It also stirred speculation that the company could be on the market, but just about one month ago, Grubhub denied reports that the company was up for sale.

A Grubhub spokesperson told Yahoo Finance that “there is unequivocally no process in place to sell the company and there are currently no plans to do so...we believe that given the current pressure on profits across our public and private competition, there will likely be strategic opportunities to acquire share this year -- given that our profitability is secure.”

Shares of the food delivery company plunged more than 30% over the past 12 months, while the broader market rose 24% in the same time period.

Grubhub’s earnings conference call with management is scheduled for Thursday at 9 a.m. ET.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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