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Uber (UBER) Q1 Loss Narrower than Expected, Revenues Beat

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Shares of Uber Technologies (UBER - Free Report) are currently trading well below its IPO price of $45. Notably, the San Francisco-based ride-hailing giant went public last month.

Recently, the company reported first-quarter 2019 results, wherein it incurred narrower-than-expected loss. Uber’s first-quarter loss of $2.26 per share compared favorably with the Zacks Consensus Estimate of a loss of $2.32 per share. Meanwhile, revenues improved 20% year over year to $3,099 million and also surpassed the Zacks Consensus Estimate of $3,073.7 million.

Uber reports through two segments — Core Platforms and Other Bets. While the Core Platforms includes the company’s core business ridesharing apart from its food delivery business — Uber Eats, the Other Bets segment comprises freight, its logistics platform, among other things.

In the first quarter, majority of the company’s revenues (98.5%) came from Core Platforms. Within the Core Platforms unit, ridesharing revenues increased 9% to $2,376 million, with gross bookings increasing 22%. Uber Eats revenues jumped 89% to $536 million, with gross bookings doubling.

Ride-sharing revenues grew 26% in the United States and Canada to $1,750 million and 26% in Europe, the Middle East and Africa to $487 million. While ride-hailing revenues increased 6% in the Asia Pacific region to $267 million, the same fell 13% in Latin America to $450 million.

At the Core Platforms segment gross bookings increased 34% while the measure surged in excess of 200% at the company’s Other Bets segment. In the quarter, total gross bookings increased 34% to $14.65 billion. Monthly active platform customers grew 33% to 93 million in the same period.

Additionally, cost of revenues (excluding depreciation and amortization) at Uber, which competes primarily with Lyft (LYFT - Free Report) in the ride hailing market, increased primarily due to higher driver incentives. In fact, Uber is also spending significantly on promotions and driver incentives in a bid to gain a market share similar to Lyft.

Uber, carrying a Zacks Rank #3 (Hold), exited the first quarter with cash and cash equivalents of $5,745 million compared with $6,406 million at the end of 2018. Long-term debt, net of current portion, at the end of the quarter stood at $6,939 million compared with $6,869 million at 2018 end.

Key Picks

Better-ranked stocks in the Business Services sector are Navigant Consulting (NCI - Free Report) and WEX (WEX - Free Report) . While Navigant Consulting sports a Zacks Rank #1 (Strong Buy), WEX is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected EPS (three to five years) growth rate for Navigant Consulting and WEX is 13.5% and 15%, respectively.

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