Stocks of Uber Technologies Inc (NYSE: UBER) crashed during after-hours trading Thursday, falling short of expectations by Wall Street analysts as the ride-hailing company nurses its wounds from $5.25 billion in losses.
With shares dropping more than 6% in the last three months, the company's loss included nearly $4 billion in share-based compensation expenses linked to a public offering it initiated last May. Revenue inched up 13% to $3.18 billion.
Market observers surveyed by FactSet had projected a decline of $2.04/share on total sales of $3.4 billion. Wedbush analyst Ygal Arounian noted that the company's loss prior to depreciation, tax, interest, and amortization coincided with Wall Street estimates.
Uber's earnings for the second quarter on Thursday shows that the company has a lot of work to do to hit more decent sales. It has shed over $6 billion for the fiscal year, so far, and with no clear-cut gameplan in the pipeline, prompting a wave of queries from Wall Street strategists about its targets for the long-term. "So far, most everything is below our estimates," Arounian said.
The latest figures reported by the San Francisco, CA-based ride-hailing service surprised analysts because smaller competitor Lyft Inc (NASDAQ: LYFT) on Wednesday had elevated sales projections and cited a waning price rivalry, boosting stocks of both companies in extended sessions on Thursday. Lyft lost around 1% while Uber dropped 5% during after-hours.
Based on figures released by IBES Data, Uber disclosed that its revenue growth weakened to 15%, and its central ride-hailing business was up only 3% to $2.1 billion. If not for a 73% increase in sales from food delivery unit Uber Eats, the company's revenue would have fallen.
According to tech analyst Beth Kingdig in an interview with Market Watch, what Uber must prove is the cost of its ride and how it can cover the service's operating expenses. "I don't like the price war narrative. What we know is that gross bookings are rising but sales are in the low double digits while losses are increasing because of subsidizing rides."
Gross bookings, a gauge of the value of car rides, food deliveries, bicycle and motorcycle trips, including other services before payments to drivers, restaurants and other expenses, were up 30% from a year earlier to $15.77 billion.
Uber's shares overall remained unchanged since its May IPO, although its stocks were up slightly at 8% during regular sessions on Wednesday before the company's Q2 results were announced.
