Shares of Uber Technologies are trading higher late Thursday after the company reported first-quarter results that showed weakness in its core ride-hailing business, but a surge in its Uber Eats food delivery segment.
But the quarterly results quickly took a back seat to commentary from Uber’s management team, which said on a conference call with investors that the rides business was starting to recover from the Covid-19 shutdowns. Uber (ticker: UBER) shares, which initially fell on the earnings report, shot higher on the rebound news. They’re currently up 8% in late trading.
CEO Dara Khosrowshahi said that ride bookings were down 80% in April, but have begun to recover, with week-over-week gains in each of the last four weeks. In the last week, bookings were up 12% in the U.S., with 14% growth in New York and 12% in San Francisco, and more substantial gains in markets that have begun reopening, including George and Texas.
Khosrowshahi said total bookings were down 40% in April, with weakness in the rides segment offset by strength in its Uber Eats business. He said the company saw 89% growth in Eats in April, and that the business had crossed an annual bookings run rate of $25 billion.
The Uber CEO said that the current crisis would delay the company breaking even on an Ebitda, or earnings before interest, taxes, depreciation, and amortization, basis, but only by a few quarters. Previously, the company had said it would break even by the end of 2020.
Shares of rival Lyft (LYFT) closed up 22% Thursday after the company’s own first-quarter earnings report.
Khosrowshahi noted that the company has cut its annual fixed costs by more than $1 billion through job cuts and other measures.
On Wednesday, the company announced that it was cutting its staff by 3,700 positions.
For the quarter, Uber posted revenue of $3.5 billion, up 14%, or 16% in constant currency, in line with Wall Street estimates. That figure includes $2.47 billion in Rides revenue, up 2%, or 4% in constant currency, with $819 million in revenue for Eats, up 53%, or 56% in constant currency. The company’s Freight business had revenue of $199 million, up 57% both as reported and in constant currency.
“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” Khosrowshahi said in a statement. “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. Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country.”
The company did not provide any guidance in its earnings press release.
Gross bookings were $10.9 billion for Rides in the first-quarter, down 5% as reported, while Eats bookings were $4.7 billion, up 52%. Total gross bookings were $15.8 billion, up 8%, or 10% in constant currency.
The company reported an adjusted Ebitda loss in the quarter of $612 million, an improvement from a loss of $869 million in the year earlier period.
For the quarter, the company reported a net loss of $2.9 billion, including $2.1 billion in investment write-downs and $277 million in stock based compensation. On an adjusted basis, the company had a loss of $1.1 billion.
Uber said it finished the quarter with $9 billion in cash and short-term investments.
Write to Eric J. Savitz at eric.savitz@barrons.com
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