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Uber Stock Down 2.65% After Hours as Its Q2 Revenue Plunges 29% but Delivery Segment Rises

Uber Technologies Inc (NYSE: UBER) delivered its Q2 earnings results including revenue that actually succeeded in beating analysts’ expectations. However, it still went down by approximately 29% from $3.17 billion during the same period last year. On Thursday, the stock closed at $34.71 with a 4.55% rise. At the time of writing the stock was down 2.65% to $33.79 in after-hours trading.

The ride-hailing and food delivery company’s losses per share stood at $1.02 compared to 86 cents per share that was expected, according to a consensus of analysts surveyed by Refinitiv. Revenue was $2.24 billion compared to $2.18 billion according to Refinitiv.

Rides gross bookings had $3.05 billion versus $3.47 billion expected, according to estimates compiled by StreetAccount while Uber Eats gross bookings in Q2 stood at $6.96 billion compared to $6.57 billion expected.

In between the period that ended June 30, 2020, the COVID-19 outbreak went on limiting people’s travel and commuting and therefore weighed heavily on Uber’s core ride-hailing business, decreasing its gross bookings by 73%. The pandemic did drive demand for Uber’s food delivery business, however, so the bookings rose by 113% in that segment of doing business.

The company managed to narrow its net losses to $1.8 billion that represents the big improvement from last year when stock-based compensation contributed to a net loss of $5.24 billion. Nelson Chai, CFO stated:

“Our Mobility segment generated $50 million in Adjusted EBITDA profit, despite a 73 percent year-over-year decline in Gross Bookings, on a constant currency basis. Meanwhile, we improved our Delivery Adjusted EBITDA margin by 33 percentage points, and took quick and decisive action to remove over $1 billion in annualized costs across the entire company, reducing Corporate G&A and Platform R&D costs by over $150 million compared to last quarter. All this, in addition to our strong balance sheet, bolsters our continued confidence that we will achieve Adjusted EBITDA profitability before the end of 2021.”

After coronavirus started heavily impacting on Uber’s business, the company moved fast to sack about 14% of its employees, over 3,500 people, and to offload its Jump electric bike business to a bike-sharing competitor called Lime, in which Uber is an investor.

In spite of all of the attempts to slash some costs, Uber didn’t stop its shopping spree. In July, it announced plans to buy Postmates, an on-demand delivery venture, for $2.65 billion in stock.

On Wednesday, Uber announced its plans to buy a UK taxi software business Autocab, but it didn’t want to reveal the exact amount. Among other things, Autocab connects riders to local taxi operators via its iGo Marketplace app. The deal should help Uber expand from 40 UK locations to 170.

Uber’s business also faces severe legal problems over whether Uber and competitors like Lyft Inc (NASDAQ: LYFT) can continue to treat drivers in the United States as independent contractors.

On Wednesday, the California Labor Commissioner’s office stated that it had filed more lawsuits against Uber and Lyft charging them of committing wage theft by misclassifying drivers as contractors rather than employees.

Uber Stock Down 2.65% After Hours as Its Q2 Revenue Plunges 29% but Delivery Segment Rises

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