Uber’s recovery accelerates, but worries about losses linger – KIRO 7 News Seattle

SAN RAMON, Calif .– (AP) – Uber’s driving service is regaining momentum it lost during the pandemic, but it’s coming at a price that puts more doubts about the company’s ability to make money.

At the same time, Uber’s unprofitable delivery service is still growing at a rapid pace, suggesting that some habits can stay at home even after people go out again.

These two trends produced Uber’s best quarterly report on the San Francisco company since the pandemic 17 months ago.

Results announced on Wednesday for the April-June period included a rare gain that investors glossed over to focus on ongoing losses in Uber’s operations.

The second quarter profit resulted from a one-time gain of $ 1.4 billion from the recent appreciation of Uber’s stake in China’s leading driving service, Didi, and a self-driving auto division recently turned over to Silicon Valley Start, Aurora.

These accounting adjustments dwarfed Uber’s losses in its business and allowed the company to post a profit of $ 1.14 billion, or 58 cents-share, in the second quarter, a loss of $ 1.78 billion -Dollars suffered in the same three-month period of 2020 at the start of the crisis reverses the pandemic.

Revenue for the quarter was $ 3.93 billion, more than doubled by the bleak conditions last year when most people were stuck at home looking for rides nowhere. Revenue exceeded the estimate of $ 3.76 billion by analysts surveyed by FactSet Research.

However, Uber investors are more likely to focus on an unorthodox metric called “Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization.”

The company had previously promised to be profitable below that bar for the last three months of the year – a promise CEO Dara Khosrowshahi reiterated on Wednesday – only to step back in the second quarter with a loss of $ 509 million. That was lower than a year ago, but the most recent quarterly loss came after an adjusted loss of $ 359 million in the first three months of the year.

The bigger loss was largely due to the bonuses and other incentives Uber is offering drivers to get back on board after many quit for safety concerns during the worst of the pandemic. In the US, it also competes against Lyft, which is also trying to lure drivers back.

Uber expects the need for driver incentives to wear off, allowing the company to reduce its adjusted loss to $ 100 million or less for the current quarter ending September, before becoming one in the final three months of the year small adjusted profit will.

However, investors clearly remain skeptical. Uber stock fell more than 4% in extended trading after the mostly bullish second quarter report was released. The stock was down more than 30% from its high of about $ 64 in February.

However, Uber had one mostly positive story to tell last quarter. The highlights included a total of 1.51 billion trips – more than double that of the previous year. The company’s revenue from transportation services also more than doubled year-over-year to $ 1.62 billion.

Despite these advances, ride-hailing revenues were still about 30% below their levels two years ago, long before the pandemic turned the economy upside down. The total number of trips decreased by about 10% compared to two years ago.

Khosrowshahi told analysts during a conference call that the driver service was almost fully operational again. However, he acknowledged that a shortage of drivers in some major markets like San Francisco and New York results in higher fares than Uber believes they will be acceptable to passengers over time.

However, things are starting to change, Khosrowshahi said, as the number of riders and delivery couriers in the US has increased by about 420,000 since February

As in recent quarters, the service that Uber has built for delivery of food and takeaway groceries is bringing in even more cash. The company’s delivery revenue was nearly $ 2 billion, more than doubling year over year. But the delivery service is also accumulating losses with its expansion.

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