Uber Technologies, Inc. UBER incurred a loss of 64 cents per share (excluding $1.06 from non-recurring items) in the first quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 79 cents. The amount of loss also narrowed significantly year over year. Moreover, total revenues of $3,543 million surpassed the Zacks Consensus Estimate of $3,381.5 million. The top line also rose 14.3% year over year owing to a significant rise in Uber Eats revenues.
Despite substantial loss of revenues in Uber’s rides business due to coronavirus woes, management is optimistic about the early signs of recovery. Ride volumes were down 80% in April. However, the company has been seeing week-over-week improvement in its rides business since the past three weeks. Per CEO Dara Khosrowshahi, “Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up.” These bullish remarks drove shares of the company up 6.1% in after-hours trading on May 7.
Following an organizational change in the third quarter of 2019, Uber started reporting through five segments, namely, Rides, Eats, Freight, Other Bets, and Advanced Technologies Group (ATG) and Other Technology Programs.
In the first quarter, majority (69.7%) of the company’s revenues came from Rides, which inched up 2% to $2,470 million. Uber Eats revenues jumped 53% to $819 million and Freight revenues soared 57% to $199 million. Revenues from Other bets came in at $30 million, up 66%. Meanwhile, ATG and Other Technology Programs generated revenues of $25 million in the reported quarter.
Total revenues grew 13% to $2,142 million in the United States and Canada. Revenues rose 13% to $552 million in Europe, the Middle East and Africa as well. Total revenues surged 32% to $352 million in the Asia-Pacific region and increased 10% to $497 million in Latin America. Monthly active platform consumers also grew 11% to $103 million.
Gross bookings from Rides declined 5% to $10.87 billion. This first-ever decline in rides gross bookings was due to stay-at-home orders across the United States and lockdowns in several other nations. Meanwhile, gross bookings from Eats augmented 52% to $4.68 billion. Gross bookings from Freight also climbed 55% to $198 million. Total gross bookings rose 8% to $15.78 billion.
Additionally, cost of revenues (excluding depreciation and amortization) at Uber, which competes primarily with Lyft LYFT in the ride hailing market, escalated on higher driver incentives. Total expenses increased 16.3% year over year to $4,806 million despite a 14.9% decline in sales and marketing expenses.
Uber, carrying a Zacks Rank #3 (Hold), exited the first quarter with cash and cash equivalents of $8.16 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 $5.7 billion compared with $5.71 billion at 2019-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Noteworthy Developments
The company recently terminated unprofitable Uber Eats services in the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay and Ukraine. Additionally, in the United Arab Emirates, the company will hand over Uber Eats operations to its subsidiary, Careem. The eight ceased operations and the transferred market accounted for 1% of Eats gross bookings and 4% of Eats adjusted EBITDA losses in the first quarter.
Further, the company announced a workforce reduction plan that would affect approximately 3,700 full-time employees in the customer support and recruiting teams. The company attributed this decision to low trip volumes and the present hiring freeze.
Additionally, Uber entered into a deal with Lime, an electric scooter and bike rental company, to transfer its JUMP e-bike and e-scooter business to the latter. In this regard, Uber is leading a $170-million investment round in Lime.
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 first-quarter 2020 adjusted earnings of $1.02 per share beat the Zacks Consensus Estimate by 6.3%. The figure improved 2% from the year-ago quarter and 1.9% sequentially. Net sales declined 6.6% on a year-over-year basis and 7.9% sequentially to $1.20 billion. Further, the top line missed the Zacks Consensus Estimate of $1.23 billion.
Fitbit’s first-quarter 2020 adjusted loss of 24 cents per share was wider than the Zacks Consensus Estimate of a loss of 22 cents. The company’s total revenues came in at $188 million, down 30.8% year over year. The figure also missed the consensus estimate of $270 million.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AMETEK Inc (AME) : Free Stock Analysis Report
Fitbit Inc (FIT) : Free Stock Analysis Report
Uber Technologies Inc (UBER) : Free Stock Analysis Report
Lyft Inc (LYFT) : Free Stock Analysis Report
To read this article on Zacks.com click here.