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How Severe is the Coronavirus Impact on Uber (UBER) Q1 Earnings?
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Uber Technologies (UBER - Free Report) , which went public on May 10, 2019, is scheduled to report first-quarter 2020 results on May 7, after market close.
The Zacks Consensus Estimate for first-quarter loss has widened 39.1% over the past 60 days. Let’s delve into the factors that are expected to have influenced the company’s performance in the said period.
With a large number of countries in a shutdown mode and road travel restricted amid coronavirus concerns, Uber’s operations were presumably affected significantly during the first quarter. The slack in demand is expected to reflect on revenues from rides. Notably, the Zacks Consensus Estimate for ridesharing revenues indicates a 4.8% decline from the previous quarter’s reported number.
Moreover, during the first quarter, Uber recorded a ‘Contra Revenue’ related to a financial assistance program for drivers and delivery people amid this health crisis. The company expects the Contra Revenue to have reduced first-quarter revenues (on a reported basis) by $17-$22 million. Additionally, it estimates an impairment charge of $1.9-$2.2 billion for the quarter due to reduction in the value of some of its minority equity investments as a result of the widespread lockdowns. This expense is anticipated to have widened net loss, on a reported basis, by $1.9-$2.2 billion.
Although aimed at long-term growth, the divestiture of the loss-making Eats India business might have had an adverse impact on the company’s first-quarter performance. In fact, the company expects gross bookings for the first quarter to decline slightly from the sequential quarter due to the divestiture.
However, revenues from Uber Eats are expected to have been strong in the quarter, especially in the face of the coronavirus outbreak. The business witnessed a substantial boost amid people preferring to stay home and order food online. The Zacks Consensus Estimate for Uber Eats revenues hints at a 7.2% rise from the fourth-quarter 2019 reported figure.
What the Zacks Model Unveils
Our proven Zacks model does not 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 -69.88% as the Most Accurate Estimate is pegged at a loss of $1.51, wider than the Zacks Consensus Estimate of a loss of 89 cents.
Zacks Rank: Uber carries a Zacks Rank #3.
Highlights of Q4 Earnings
In the last-reported quarter, Uber incurred a loss of 64 cents per share, narrower than the Zacks Consensus Estimate of a loss of 68 cents. Moreover, the loss contracted year over year. Although, total revenues of $4,069 million rose 37% year over year, it missed the Zacks Consensus Estimate of $4,099.8 million.
Stocks to Consider
Investors interested in the broader Computer and Technology sector may consider AMETEK, Inc. (AME - Free Report) , Arista Networks, Inc. (ANET - Free Report) and ANSYS, Inc. (ANSS - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Arista Networks has an Earnings ESP of +0.18% and a Zacks Rank of 3. This company will also report first-quarter financial numbers on May 5.
ANSYS has an Earnings ESP of +2.14% and a Zacks Rank #3. This company will release first-quarter earnings numbers on May 6.
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How Severe is the Coronavirus Impact on Uber (UBER) Q1 Earnings?
Uber Technologies (UBER - Free Report) , which went public on May 10, 2019, is scheduled to report first-quarter 2020 results on May 7, after market close.
The Zacks Consensus Estimate for first-quarter loss has widened 39.1% over the past 60 days. Let’s delve into the factors that are expected to have influenced the company’s performance in the said period.
With a large number of countries in a shutdown mode and road travel restricted amid coronavirus concerns, Uber’s operations were presumably affected significantly during the first quarter. The slack in demand is expected to reflect on revenues from rides. Notably, the Zacks Consensus Estimate for ridesharing revenues indicates a 4.8% decline from the previous quarter’s reported number.
Moreover, during the first quarter, Uber recorded a ‘Contra Revenue’ related to a financial assistance program for drivers and delivery people amid this health crisis. The company expects the Contra Revenue to have reduced first-quarter revenues (on a reported basis) by $17-$22 million. Additionally, it estimates an impairment charge of $1.9-$2.2 billion for the quarter due to reduction in the value of some of its minority equity investments as a result of the widespread lockdowns. This expense is anticipated to have widened net loss, on a reported basis, by $1.9-$2.2 billion.
Although aimed at long-term growth, the divestiture of the loss-making Eats India business might have had an adverse impact on the company’s first-quarter performance. In fact, the company expects gross bookings for the first quarter to decline slightly from the sequential quarter due to the divestiture.
However, revenues from Uber Eats are expected to have been strong in the quarter, especially in the face of the coronavirus outbreak. The business witnessed a substantial boost amid people preferring to stay home and order food online. The Zacks Consensus Estimate for Uber Eats revenues hints at a 7.2% rise from the fourth-quarter 2019 reported figure.
What the Zacks Model Unveils
Our proven Zacks model does not 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 -69.88% as the Most Accurate Estimate is pegged at a loss of $1.51, wider than the Zacks Consensus Estimate of a loss of 89 cents.
Zacks Rank: Uber carries a Zacks Rank #3.
Highlights of Q4 Earnings
In the last-reported quarter, Uber incurred a loss of 64 cents per share, narrower than the Zacks Consensus Estimate of a loss of 68 cents. Moreover, the loss contracted year over year. Although, total revenues of $4,069 million rose 37% year over year, it missed the Zacks Consensus Estimate of $4,099.8 million.
Stocks to Consider
Investors interested in the broader Computer and Technology sector may consider AMETEK, Inc. (AME - Free Report) , Arista Networks, Inc. (ANET - Free Report) and ANSYS, Inc. (ANSS - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
AMETEK has an Earnings ESP of +1.98% and a Zacks Rank #3. The company will report first-quarter earnings numbers on May 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks has an Earnings ESP of +0.18% and a Zacks Rank of 3. This company will also report first-quarter financial numbers on May 5.
ANSYS has an Earnings ESP of +2.14% and a Zacks Rank #3. This company will release first-quarter earnings numbers on May 6.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>