Uber expresses optimism for 2020 as its net quarterly loss narrows in the fourth quarter

Uber
revealed its quarterly loss to have narrowed as compared to what the analysts
had anticipated on Thursday. The American ride-hailing service also announced
its forecast for EBITDA profitability.

Uber
had previously committed to profitability next year. Following CEO Dara
Khosrowshahi’s statement that the EBITDA profitability target is likely to be
hit in 2020’s fourth quarter, Uber was seen trading around 10% higher in extended
trading. Almost half of the gain, however, was lost on Friday with the share
prices settling around 5% higher.

Uber’s
Figures Versus Analysts’ Estimates

According
to Refinitiv, analysts were expecting Uber to note $4.06 billion in revenue in
the recent quarter. The estimate for loss per share was highlighted at 68
cents. In its earnings report on Thursday, the company marginally beat the estimate
for revenue printing $4.07 in the recent quarter. In terms of loss per share, Uber
announced a much lower 64 cents in the fourth quarter.

On
an annualized basis, growth in Uber’s revenue was recorded at 37% from a lower
30% in the third quarter. In fiscal 2019, $8.51 billion of net loss was attributable
to the ride-hailing service. Much of the loss, as per the experts, was ascribed
to stock-based compensation.

In
its guidance for fiscal 2020, Uber declared that it expects $1.35 billion in
loss that came out sharply lower than the FactSet’s forecast of $2.83 billion
in 2020. Gross bookings in Uber’s primary unit of rides were valued at $13.51
billion that marked an 18% growth. The reading, however, was still lower than
the analysts’ estimate of $13.60 billion in the recent quarter.

Gross
Bookings In Uber Eats Grew By 71% In The Recent Quarter

Uber
Eats, on the other hand, was reported to have generated $4.37 billion in gross
bookings highlighting a massive 71% growth. Eats segment also beat the experts’
forecast of $4.13 billion in gross bookings in Q4.

Driver
referrals and incentives in the Eats segment amounted to a $1.13 million in
expenditure for Uber in 2019, out of which, $319 million was attributed to the
fourth quarter. In the rides segment, however, such costs for Uber were
reported at $123 million in 2019 with the fourth quarter contributing $20 million
to it.

Uber’s
performance in the stock market in 2020 has remained upbeat so far with the
company having gained around 30% in January. At the time of writing, Uber is
exchanging hands at $40.54 that marks almost the same level at which it debuted
in the stock market with its IPO in May 2019.