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Uber (UBER) to Report Q4 Earnings: What's in the Offing?

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Uber Technologies UBER, which went public on May 10, 2019, is scheduled to report fourth-quarter 2019 results on Feb 6, after market close.

The Zacks Consensus Estimate for the December-end quarter is currently pegged at a loss of 69 cents, indicating a deterioration from the consensus mark of a loss of 66 cents 90 days ago. Given this backdrop, let’s delve into the factors that might have influenced the company’s performance in the said period.

Alike the first three quarters of 2019, high costs are likely to have adversely impacted Uber’s fourth-quarter 2019 performance. With Uber spending significantly on promotions and driver incentives to cope with competition from rivals like Lyft LYFT for higher market share, escalating costs are expected to get reflected in the company’s bottom-line results.

In a bid to cut costs and improve efficiencies, Uber trimmed its workforce. In October 2019, Uber reduced its headcount by roughly 350 employees. As a result, the surge in costs might have been mitigated to some extent. Moreover, the Core Platforms unit is likely to have performed well on the back of upbeat ridesharing revenues.

Ridesharing revenues are likely to have been boosted by Uber’s endeavors to expand its operations. In line with its expansion efforts, in October 2019, the company increased its market share in West Africa by virtue of a boat service in the Nigerian city of Lagos. The Zacks Consensus Estimate for revenues from rides for the fourth quarter is pegged at $2,978 million, higher than the $2,895 million, reported in third-quarter 2019. The Zacks Consensus Estimate for fourth-quarter 2019 Uber Eats revenues is pegged at $699 million, higher than the $645 million, reported in the September-end quarter.

Uber Technologies, Inc. Price and EPS Surprise

Uber Technologies, Inc. Price and EPS Surprise

Uber Technologies, Inc. price-eps-surprise | Uber Technologies, Inc. Quote

Highlights of Q3 Results

In the last reported quarter, Uber incurred a loss of 68 cents per share, narrower than the Zacks Consensus Estimate of a loss of 83 cents. Moreover, the amount of loss decreased year over year. Total revenues of $3,813 million beat the Zacks Consensus Estimate of $3,746.4 million and also rose 29.5% year over year.

What the Zacks Model Unveils

Our proven Zacks model does not conclusively predict a beat for Uber this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. However, that is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Uber has an Earnings ESP of 0.00%, as the Most Accurate Estimate is in line with the Zacks Consensus Estimate.

Zacks Rank: Uber carries a Zacks Rank #3, which increases the predictive power of ESP.

Stocks to Consider

Here are some companies with the right combination of elements to beat on earnings in their upcoming releases.

McKesson MCK carries a Zacks Rank #2 and has an Earnings ESP of +0.07%. The company will announce its third quarter fiscal 2020 (ended Dec 31, 2019) results on Feb 4.

Spirit Airlines (SAVE - Free Report) carries a Zacks Rank #2 and has an Earnings ESP of +3.24%. The company is expected to announce its fourth-quarter 2019 results on Feb 5.

 

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