Uber Earnings: What to Look for

Key Takeaways

  • Analysts estimate EPS of – $0.91 vs$4.71 Q2 of FISCAL year 2019.
  • Gross bookings for Walks segment is expected to plunge by nearly 70%.
  • COVID-19 is likely to cause a sharp decline in sales.

Uber Technologies Inc. (UBER), the tower-originally a service that was made public in 2019, maybe delay the plans of the profitability to the next year, or at least until the COVID-19 pandemic is over. The crisis has limited millions of people to the house, causing a sharp decline in the number of clients from all walks, Uber’s main business.

Investors will look at just how this trend affects the company of the Uber, reports earnings on August 6, 2020 for the 2nd quarter of the FISCAL year 2020. Analysts expect Uber to post a net loss per share-basic and revenue to plunge.

Investors will focus on Uber Gross Bookings for its Attractions segment, a key measure offering a more precise indicator of the way in which the company’s ride-hailing service has been affected during the pandemic. Gross bookings registered a slight decrease in the 1st quarter of FISCAL year 2020, but analysts expect a depreciation of 69.8% decline in Q2.

Uber is stock has badly lagged the broader market over the last year. Its shares have provided investors with a total return of -19.1% over the last 12 months compared to the S&P 500 index total return of 12.8%. In fact, the long-awaited IPO of the unicorn ride-hailing start-up in May of last year has largely disappointed investors as the stock has recently traded around 20% below its first day closing price just below $42.00.

Source: TradingView.

In spite of the view of earnings for Q1 of FISCAL year 2020, sorely missed the expectations of analysts, Uber shares continued to recover from the pandemic induced by the collapse of the market started at the end of February. The company reported – $1.70 in earnings per share (EPS) and sales growth of 14.3%. That is larger than the expected loss and the slower growth in turnover of at least two years portends more problems in advance as the virus continues to spread. The title has achieved the most aside after a significant decline at the beginning of June.

The first quarter was a stark contrast from Uber’s reported earnings for the last quarter of 2019, before the global economy became overwhelmed by COVID-19. The company has registered an EPS of$0.64 and revenue growth of 36.8% in the 4th quarter of FISCAL year 2019. It was the smaller of the loss suffered by Uber since its ipo, a sign that the company, its profit outlook was improving. It was also the fastest revenue growth since Q3 of FISCAL year 2018.

Analysts expect a rough second quarter, at least as much as the recipes. Revenues are expected to decline from 32.6% for Q2 of FISCAL year 2020, which marks the first decline in at least ten quarters. However, the cost reduction measures implemented since the 1st trimester can help to improve the income of the situation. Analysts expect Uber is a loss to narrow dramatically, and this is striking in light of its plunging sales. They estimate EPS of$0.91, which is less than one-fifth of the -$4.71 on the same period a year earlier.

The forecast is also bearish for the entire year. Revenue is expected to decline by 9.6% and EPS is expected to be -$3.79.

Uber Key Measures

Estimate of the Q2 2020
Real for the 2nd quarter of 2019
Real for the 2nd quarter of 2018

Adjusted Earnings Per Share ($)
-0.91
-4.71
-1.99

Revenue ($B)
2.1
3.2
2.8

Gross Bookings – Wrinkle ($B)
3.7
12.2
10.2

Source: Visible Alpha

As mentioned above, investors will also focus on another key Uber metric: Gross Bookings from its ride-hailing service, where Uber gets most of its revenue. This metric is defined as the total value in dollars, including applicable taxes, rights and fees generated from Uber Rides segment. The metric allows no adjustment for consumer discounts and rebates, neither for the driver earnings and incentives. Uber Rides includes 69% of total Gross Bookings, in the first quarter of the year 2020.

The locks introduced in order to limit the spread of COVID-19 means that people move less than they would normally. That means fewer taxis are hailed, which has negatively affected Uber’s Gross Bookings for the Attractions segment. The metric has decreased from 5.0% in Q1 of FISCAL year 2020, after an increase of 17.7% in the 4th quarter of FISCAL year 2019, reflecting the negative impact of the pandemic. Analysts expect the vast majority of Uber’s Gross Bookings in the merry-go-rounds disappear in the course of the YEAR Q2 2020, plunging more than two-thirds.

On a more optimistic note, Uber Eats, the company’s meal delivery business, is growing. Gross bookings for the Food segment increased from 52.5% in Q1 of FISCAL 2020. Analysts expect a 91.7% increase for the 2nd quarter of FISCAL 2020, which would be the fastest pace since the 1st quarter of FISCAL year 2019. Still, Uber Eats, which represents only 30% of the total bookings in Q1, which means that its strength may not not be sufficient to compensate for the weakness in the largest of the Walks segment. Uber seems to be trying to change that, having recently announced plans to acquire food-delivery Postmates Inc. and for the inauguration of a new delivery service for groceries in some places.

Source: investopedia.com

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