Monday, November 4, 2019

Uber's revenue improves but user growth, food delivery orders disappoints


San Francisco-based Uber is seeking to assure investors it can evolve from a ride-hailing service to a global all-in-one transportation platform.


Uber Technologies Inc. disappointed investors with quarterly results showing lackluster gains in bookings and monthly active users, two of the metrics most closely watched by Wall Street.

The ride-hailing company beat estimates for quarterly revenue and loss, improved its annual loss forecast and pledged to turn a profit by 2021. Those weren’t enough to lift the stock, though. Shares were down about 5 per cent in extended trading after the results.

The San Francisco-based company is seeking to assure investors it can evolve from a ride-hailing service to a global all-in-one transportation platform. There could be more pressure on Uber shares Wednesday, when a stock lockup for a large swath of shareholders expires. An additional 1.5 billion shares could be eligible to trade according to Renaissance Capital, nearly doubling the total number outstanding. Of venture-backed companies, only Alibaba Group Holding Ltd. had a larger lockup of 1.6 billion shares.
While Uber’s overall results were good, uncertainty about the possibility of new shares flooding the market cast a shadow that may have depressed share price, said Ali Mogharabi, an analyst at Morningstar.

It may be people getting out now, thinking that after Wednesday it’ll drop,” he said.
On a conference call with reporters following the report, Uber executives said the company would spend less aggressively and turn an adjusted profit in 2021. “We will be driving discipline across the company and only doing investments that we can afford,” said Chief Executive Officer Dara Khosrowshahi.

The forecast echoed a commitment from Uber’s smaller rival, Lyft Inc., which said it would be profitable by the fourth quarter of 2021, a year earlier than previously expected. Lyft, which focuses exclusively on transportation, blew past analysts’ third-quarter estimates when it reported results last week.


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