Uber's Food-Delivery Business, Cost Cuts Cushion Pandemic Hit -- Update
February 10 2021 - 6:50PM
Dow Jones News
By Preetika Rana
Uber Technologies Inc. posted a narrower annual loss on the back
of its food-delivery business and aggressive cost cuts, even as the
coronavirus pandemic crushed its core ride-hailing operations.
The San Francisco-based company on Wednesday reported a net loss
of $6.76 billion for 2020, compared with a loss of $8.5 billion the
year before. While widespread shelter-in-place orders crippled
Uber's rides business, food delivery thrived as the same health
mandates kept people from going to restaurants. Revenue for the
year declined 14% to $11.13 billion.
Uber overhauled its business during the health crisis, cutting
about a quarter of its staff and shedding noncore businesses, among
other moves, leading to $1 billion in savings on fixed expenses
last year. Meanwhile, the company doubled down on delivery, buying
small food-delivery rival Postmates Inc. last year and ferrying new
items such as groceries and medicines.
Uber's delivery bookings in the fourth quarter increased more
than twofold from year-earlier levels. However, rides bookings
halved. That downturn was broadly in line with ride-share rival
Lyft Inc., whose fourth-quarter revenue declined 44%.
Overall, Uber's fourth-quarter revenue fell 16% to $3.16
billion. The net loss for the period narrowed to $968 million, from
$1.09 billion in the year-earlier quarter. The latest results were
slightly below Wall Street's expectations.
But Uber's adjusted loss before interest, taxes, depreciation
and amortization beat analysts' projections. Like Lyft, Uber has
said it expects to become profitable by that measure by year-end --
a goal executives reiterated on a conference call with analysts
Wednesday.
Uber posted an adjusted Ebitda loss of $454 million for the
fourth quarter, compared with a year-earlier loss of $615 million.
Analysts surveyed by FactSet had predicted on average a loss of
$507 million on that basis in the latest period.
Food delivery, an expensive logistical undertaking, has
typically been a drag on Uber's bottom line. But Uber trimmed its
adjusted Ebitda loss from delivery to $145 million in the fourth
quarter, from $461 million a year earlier, marking the unit's best
three-month performance.
Uber's shares are up more than 80% from early November,
benefiting from a big regulatory win in the company's home state
and, more recently, from Covid-19 vaccine distribution. Shares were
down about 4% in after-hours trading Wednesday.
Write to Preetika Rana at preetika.rana@wsj.com
(END) Dow Jones Newswires
February 10, 2021 18:35 ET (23:35 GMT)
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