On Monday, Uber has announced third-quarter earnings for the current year. Notably, the figures have beat analyst expectations on the top and bottom lines. But the company’s shares have experienced a massive fall, about 5%, after the reporting over $1 billion in net losses. Yes, the ride-hailing giant has reported a loss of $1.16 billion for Q3, 2019, topping its $986 million loss during the same time last year. The loss also includes $401 million in stock-based compensation.
A year ago, Uber’s profits grew to 3.8 billion, up from $2.9 billion in the year-ago period, revealing a 30% boost. But even as Uber’s core business indicates stabilization and its core markets continue to show growth. But its other business units seem to lose cash at extremely high rates. Uber’s CEO Dara Khosrowshahi, said the latest quarter reports decisively demonstrate the growing profitability of their Rides sector. He added Rides Adjusted EBITDA is up 52% year-over-year and more than covers their corporate overhead. The executive noted that they are pleased to see the impact that continued category leadership, along with greater financial discipline.
Losses in earnings at the company’s Uber Eats business raised 67% to $316 million from $189 million in the year-ago period. Besides, performance in the company’s freight division seems even worse. Losses in freight heightened by 161%, increasing to $81 million from $31 million in the same quarter of 2018. Also contributing to the company’s losses for the quarter were stock-based compensation expenses, which added another $401 million to the tallies against the company. Given that the lock-up period is about to end for institutional investors, that could spell even more trouble for the company — as institutional investors who bought into the company before its public offering may look to sell. That said, Uber has taken various steps to correct its course and put the company on a path to profitability, which Khosrowshahi says should happen in the next two years.
Kevin has worked as a business executive in an insurance firm before joining Janmorgan Media as the major business correspondent. After joining here, he has helped craft not only some of the insightful articles but also regular articles that don’t compromise perspective. If not checking out business publications or news, you can see her listening to music.