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UPDATE 2-GrubHub goes direct to diners after acquisitions
February 5, 2015 / 2:32 PM / 3 years ago

UPDATE 2-GrubHub goes direct to diners after acquisitions

* Company acquires DiningIn, Restaurants on the Run

* Sees Q1 rev $83-$85 mln vs est. $80.1 mln

* Q4 active diners up 47 pct

* Shares close up 6.2 percent (Adds details, CEO quote, updates share price)

By Subrat Patnaik

Feb 5 (Reuters) - GrubHub Inc forecast better-than-expected revenue for the current quarter, bolstered by two acquisitions that will allow the company to deliver food from 3,000 restaurants direct to U.S. customers.

GrubHub’s purchase of DiningIn and Restaurants on the Run gives the company a head start over other potential new entrants to the restaurant delivery business. Amazon.com Inc and Google Inc are experimenting with same-day deliveries.

The company’s shares closed up 6.2 percent on Thursday.

Until now, GrubHub, a $3 billion company, has received a commission from restaurants on orders booked through its website and mobile app. The restaurants deliver the food themselves.

For about the past year, it has carried out limited testing of its own deliveries in San Francisco, Los Angeles and its home city of Chicago - a service that it will now begin in earnest.

“We are investing heavily in that, as we believe higher quality service will accelerate our growth and our capture of that $70 billion opportunity in front of us,” Matt Maloney, the company’s chief executive and co-founder, told Reuters.

Online food delivery companies have benefited as more people use smartphones and other devices to order over the Internet. GrubHub users in more than 800 U.S. cities, as well as London, can order everything from expensive steaks to bento boxes.

The number of active diners using its services rose 47 percent to about 5 million in the quarter ended Dec. 31 from a year earlier.

Maloney said the two acquisitions, announced on Thursday, would add combined annual revenue in excess of $25 million. The company closed the acquisition of DiningIn on Wednesday and expects to close the Restaurants on the Run deal within a month.

GrubHub forecast revenue of $83 million to $85 million for the current quarter, beating the average analyst estimate of $80.1 million, according to Thomson Reuters I/B/E/S.

Net income rose to $10.8 million, or 13 cents per share, in the fourth quarter ended Dec. 31 from $2.2 million, or 3 cents per share, a year earlier.

Revenue rose to $73.3 million from $49 million.

Analysts were expecting a profit of 11 cents per share and revenue of $70.3 million, according to Thomson Reuters I/B/E/S.

GrubHub shares closed at $39.76 on the New York Stock Exchange on Thursday. They have risen 53 percent since the company went public in April. (Editing by Don Sebastian, Simon Jennings and Robin Paxton)

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