February 7, 2019 / 2:10 PM / 15 days ago

GrubHub results, forecast miss estimates, shares tank

(Reuters) - GrubHub Inc reported lower-than-expected quarterly results on Thursday and forecast adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the full year below Wall Street estimates, sending its shares down 21 percent to a two-year low.

The online food delivery company expects first quarter adjusted EBITDA between $40 million and $50 million and for the full year between $235 million and $265 million.

Analysts were expecting EBITDA to be $58.48 million for the first quarter and $284.16 million for the year.

“GrubHub does not have any long lasting competitive advantage and at some point it needs to spend much more to keep getting more people to use its app,” Morningstar Research Services analyst Ali Mogharabi told Reuters.

“This is coming to fruition where the bigger names like Uber Eats have been eating into GrubHub’s market share in the US.”

For the fourth quarter, GrubHub results missed analysts’ estimates as the company increased its spending on marketing and expansion activities to attract more people to its platforms.

GrubHub, which has been under heavy pressure from rivals Amazon.com Inc owned Amazon Restaurants and Uber Eats, has been an active player in the acquisitions market and spends heavily on expanding its delivery network and marketing activities.

The company said it spent $69.9 million on sales and marketing in the fourth quarter, an increase of nearly 54 percent.

Uber Eats could also raise the pressure on GrubHub if its deep-pocketed parent Uber Technologies Inc were to use some of the added funding it would get in a potential IPO which it has confidentially filed for with the U.S. SEC.

GrubHub reported a net loss attributable to common stockholders of $5.2 million, or 6 cents per share, in the fourth quarter ended Dec. 31, compared to a profit of $53.5 million, or 60 cents per share, a year earlier.

Excluding items, the company earned 19 cents per share, missing analysts’ average estimate of 28 cents per share, according to IBES data from Refinitiv.

Revenue rose about 40 percent to $287.7 million, also missing analysts estimate of $290.5 million.

Reporting by Shariq Khan in Bengaluru; Editing by Shailesh Kuber

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