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Investor indigestion at GrubHub

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Investor indigestion at GrubHub

A 20% discount is something you’d want to get on a dinner bill. But it’s not something you want in an earnings report. That in a nutshell explains why shares of Grubhub fell 10% to $40.85 Wednesday even though the online food-ordering company reported record earnings for its first quarter.AP WALL STREET GRUBHUB F USA NY

GrubHub earned $10.6 million, or 12 cents a share in the three months, up 143% from a year earlier.  The problem is analysts had been expecting it to do even better and deliver 15 cents a share, according to Factset. So its results fell 20% short of that.

The company bills itself as the USA’s leading online and mobile food ordering platform, allowing diners to get food from about 30,000 takeout restaurants in more than 800 cities from the comfort of their couch. And on top of disappointing investors with results in it the latest quarter, Grubhub added to their heartburn with a disappointing projection for the second quarter now underway.

But Wednesday aside, Grubhub has treated shareholders well. The stock is up 20% from its $34 close its first day of trading on April 4, 2014 and up 57% from its $26 IPO price. That same period the Standard & Poor’s 500 index is up 13%.

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