Less is more.
Uber Technologies Inc. shares dipped 5% then rose 5% in after-hours trading Thursday after the company reported a narrower-than-expected loss and fourth-quarter revenue largely in line with Wall Street estimates. More significantly, Uber disclosed in a conference call it expected to reach an adjusted profit by the end of 2020 — earlier than its previous goal of 2021.
The losses continued to mount for Uber UBER, +0.76%, which reported revenue of $4.07 billion, in line with expectations of $4.07 billion from analysts polled by FactSet. But the rate at which Uber is losing money is slowing demonstrably, to the relief of investors.
See also: Uber earnings preview: Another big loss is expected, but so is cost-cutting
The ride-hailing service said it lost $1.1 billion, or 64 cents per share, compared with FactSet estimates of a loss of 68 cents per share. With its latest money-losing quarter, Uber has lost approximately $8.5 billion since its May 2019 initial public offering, but offered proof that an aggressive austerity program is making progress. (In the same quarter a year ago, Uber lost $887 million, or $1.97 a share.)
“We recognize that the era of growth at all costs is over,” Uber Chief Executive Dara Khosrowshahi said in a statement following the earnings announcement. “In a world where investors increasingly demand not just growth, but profitable growth, we are well-positioned to win through continuous innovation, excellent execution and the unrivaled scale of our global platform.”
“We are challenging the team to get to profitability,” Khosrowshahi later said in a conference call with analysts. He said he expects Uber to be profitable on an Ebitda basis (earnings before interest, taxes, depreciation and amortization) in the fourth quarter this year. “We are confident we can reach long-term margins” while eliminating what he called “empty calories” in system inefficiencies, he added.
As Uber cut losses, its business continues to grow. Gross bookings, which include the total value of ride-hailing and food-delivery orders placed on the app, improved 28% year-over-year to $18.1 billion in the quarter. Another key business indicator, monthly active platform consumers, surged 22% to 111 million.
The company has been cutting costs — whether through more than 1,000 jobs cut in three recent rounds to selling its food-delivery service in India to Zomato for a 9.9% stake — in an aggressive bid to make money. Khosrowshahi has vowed to reach adjusted Ebitda profitability by the end of 2020 instead of 2021.
“Uber finally delivered a quarter with minimal noise as it appears an improving pricing environment and a focus on a bloated cost structure is helping the model/fundamentals,” Wedbush Securities analyst Ygal Arounian said in a note Thursday following Uber’s results. Wedbush maintains an Outperform rating on Uber shares, with a price target of $50, implying a 35% upside to its closing price of $37.09 on Thursday.
Uber shares have tumbled 11% since the company went public on May 10, 2019, compared to a gain of 16% for the broader S&P 500 SPX, +0.33% .
https://news.google.com/__i/rss/rd/articles/CBMiY2h0dHBzOi8vd3d3Lm1hcmtldHdhdGNoLmNvbS9zdG9yeS91YmVyLXN0b2NrLXR1cm5zLWhpZ2hlci1vbi1uYXJyb3dlci10aGFuLWV4cGVjdGVkLWxvc3MtMjAyMC0wMi0wNtIBT2h0dHBzOi8vd3d3Lm1hcmtldHdhdGNoLmNvbS9hbXAvc3RvcnkvZ3VpZC85OEExRjA4NC00NDdGLTExRUEtQTVGMS1EQjQ0QjgxOThBOTg?oc=5
2020-02-06 22:43:00Z
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