Uber (UBER) Q2 Loss Wider Than Expected, Revenues Drop 29%

Uber Technologies, Inc. UBER incurred a loss of $1.02 per share, wider than the Zacks Consensus Estimate of a loss of 78 cents. However, the amount of loss narrowed by 78.4% year over year.

Meanwhile, total revenues of $2,241 million surpassed the Zacks Consensus Estimate of $2,175.6 million. The top line plunged 29.2% year over year due to weakness in the ride-hailing segment, thanks to coronavirus confining people to their homes. Following this disappointing show, shares of the company declined 2.5% in after-hour trading on Aug 6.

Following an organizational change in the third quarter of 2019, Uber, carrying a Zacks Rank #3 (Hold), started reporting through five segments, namely, Mobility (formerly Rides), Delivery (formerly Eats), Freight, Other Bets, and Advanced Technologies Group (“ATG”) and Other Technology Programs. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the second quarter, majority (54%) of the company’s revenues came from Delivery. Revenues from this segment surged more than 100% year over year to $1,211 million. The company’s delivery business is experiencing a boom with orders from homebound customers surging. Mobility revenues dropped 67% year over year to $790 million and Freight revenues climbed 27% to $211 million. Revenues from Other Bets came in at $4 million, down 86%. Meanwhile, ATG and Other Technology Programs generated revenues of $25 million in the reported quarter.

Total revenues declined 36% to $1,250 million in the United States and Canada. While revenues fell 44% to $232 million in Latin America, it slid 21% to $401 million in Europe, the Middle East and Africa. The same soared 30% to $358 million in the Asia-Pacific region. Monthly active platform consumers declined 44% to $55 million.
 
Gross bookings from Mobility declined 75% to $3.05 billion. Meanwhile, gross bookings from Delivery augmented more than 100% to $6.96 billion. Gross bookings from Freight also climbed 27% to $212 million. However, gross bookings from Other Bets plummeted 67% to $5 million. Total gross bookings decreased 35% to $10.22 billion.
 
Despite higher driver incentives, cost of revenues (excluding depreciation and amortization) at Uber, which competes primarily with Lyft LYFT in the ride-hailing market, decreased year over year. Total expenses declined 55.5% year over year to $3.85 billion with sales and marketing expenses falling 39.8% and research and development expenses decreasing 80.9%. Lyft carries a Zacks Rank #3.

Uber exited the second quarter with cash and cash equivalents of $6.75 billion compared with $10.87 billion at the end of 2019. Long-term debt, net of current portion at the end of the quarter, was $6.69 billion compared with $5.71 billion at 2019-end.

The company recently entered into an agreement to acquire Autocab, a U.K.-based taxi-software company. Additionally, it closed its previously announced purchase of a majority interest in Cornershop in all jurisdictions, except for Mexico.

Performance of Other Computer & Technology Stocks

Within the broader Computer and Technology sector, AMETEK, Inc. AME and Fitbit, Inc. FIT recently reported earnings numbers.

AMETEK’s second-quarter 2020 adjusted earnings of 84 cents per share beat the Zacks Consensus Estimate of 72 cents. Moreover, net sales of $1,012 million surpassed the Zacks Consensus Estimate of $974.6 million. This stock carries a Zacks Rank #3.

Fitbit, carrying a Zacks Rank #3, incurred a loss of 12 cents in second-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of 21 cents. Total revenues of $261 million missed the Zacks Consensus Estimate of $204 million.

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