Uber Earnings, What to Expect ?
Analysts expect a 33% increase in Uber Eat's revenues, compared with Q1 2020 revenue figures.
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Shahid is a business graduate, with a knack for writing on business and finance topics.
2020-08-05 10:58

Uber Technologies (NYSE: UBER), a ride-hailing service, will report it's second-quarter earnings on Aug 6, 2020. The analysts predict lower earnings of $2.1 billion for Q2 2020 as compared to $3.1 billion for the same quarter last year, showing a decline of 32%, compared with Q2 2019. This translates to an expected loss of 79 to 81 cents per share, approximately $1.5 billion in dollar terms. As compared to the previous quarter, revenue from ride-hailing business in the second quarter plummeted 71.5%. The lower estimates stem from the coronavirus induced lockdown during the second quarter that left no demand for ride-hailing services. As a result, the revenues from the taxi business are expected to be severely dented. Around 80% plunge in ride-hailing sales is expected in the second quarter.

Uber Earnings, What to Expect ?

Uber Eats, a food-delivery business of Uber, is, however, slated for achieving higher revenues, thanks to the increased demand for food delivery during the pandemic lockdown period when restaurants were closed for dine-in services. Analysts expect a 33% increase in Uber Eat's revenues, compared with Q1 2020 revenue figures. Uber Eats gross bookings are expected at $6.7 billion, up 90% compared with the last quarter. To diversify its business, Uber, in July 2020, acquired Postmates -- a food delivery service with 8% market share. The acquisition is worth $2.65 billion. This will increase Uber's meal-delivery market share from 29% to 37% in the US, with DoorDash controlling 45% of the market share.

While the Uber's Postmates acquisition will not have any effect on second-quarter earnings, it can serve as a lifeline, providing additional revenue, in case the market conditions related to ride-hailing service do not improve. Despite showing double-digit growth in the food-delivery business, it has been losing money in this market segment as well.

Uber has the potential to become not only profitable but a market leader as well. It has been able to grab a good chunk of market share in both ride-hailing and food delivery service. Dara Khosrowshahi, Uber's CEO, has a tough task at his hands to steer the company out of losses and find ways to turn it profitable.


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

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2020-08-05 10:58

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About the Author
Shahid is a business graduate, with a knack for writing on business and finance topics.


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