Whiplash! Uber Posts Record-Setting Quarterly Loss

August 12, 2019 10:40 am Published by
Last month, in our post “2019 Unicorns: Who’s Still Got the Magic?”, Uber was a company that had fared well since it galloped onto Wall Street. The future looked bright and shares were up. But just this week, when the ride-sharing company reported its earnings for the second time as a public company, it announced that it had posted its largest-ever — and a record-setting — quarterly loss of $5.2 billion. Not surprising, concern went up and stocks went down by 8 to 11 percent after the news. What does the road ahead look like for Uber?

According to CNBC, Uber explained the staggering loss as being due to stock-based compensation. Increased global competition has also been named as a reason. Uber missed expectations on both the top and bottom lines, with a loss per share of $4.72 instead of the anticipated $3.12 per share. Wall Street expected the company’s revenue to be at $3.36 billion, but it amounted to $3.17 billion instead.

TechCrunch noted that despite the revenue growth of 14 percent of year-over-year, there were concerns over the “relatively” slow growth.

CNBC provides startling context on the loss. There were just three companies in the S&P 500 that lost billions in all of 2018: General Electric, Kraft Heinz and Newell Brands.

In an interview with CNBC, Uber CEO Dara Khosrowshahi was much more optimistic. He called the loss a “once-in-a-lifetime” hit and said that he has no doubt that the company will eventually break even and be a profitable business. Khosrowshahi also said that Uber is targeting a 30 percent revenue growth later this year and for the losses to subside in 2020 and 2021.
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