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Uber has released reports for its third quarter which, unsurprisingly, still records significant losses.
Apart from the popularity of its ride-hailing services, Uber is also very well-known as a market player all over the world and especially in the finance sphere for its continuous and rising loss over the years. Recently the company announced a report for its just-ended 3rd quarter which surpassed estimates predicted by financial analysts. However, Uber’s stock (now it’s trading at approximately $31) still lost up to 5% as the company still announced that it had lost well more than $1 billion.
The fact that it beat estimates might signify some growth in pro-Uber quarters and might be a good enough reason to expect that the company’s forecast of turning a profit by 2021 is feasible. According to data analysis and assessment provider Refinitiv, estimates for loss per share was pegged at 81 cents, while revenue was set at $3.69 billion. However, the figures show that Uber hit a $3.81 billion revenue with a loss per share better than Refinitiv’s estimate, at 68 cents.
The loss is still worrisome for investors. The company lost $1.16 billion in the quarter, an increase of $174 million from the same period in 2018. Regardless, CEO Dara Khosrowshahi is optimistic about 2021 and has suggested that the company can turn a profit by then. At the moment, however, there is the fear that investors will be getting out of their positions and the market will be flooded with shares. Analysts figure that the next few days might be very tumultuous for Uber stock because a lockup period that contractually prevented major investors from disposing of their shares, will end tomorrow on November 6.
Uber is now significantly focused on cutting down on its expenditure as much as it can afford to. Over the last few months, the company has laid off more than a thousand staff in different roles, in a bid to keep some of its funds within, and probably channel it into more related and profitable endeavors. The company also reduced discounts and incentives given to both riders and drivers, and according to Khosrowshahi, there is an 18-month plan to completely abandon any extra endeavors it has dipped into and sell off all related assets, if it cannot ensure it will be a number 2 minimum in that industry.
Uber’s other divisions also didn’t do great as well. For the food delivery service, Uber Eats, losses jumped from $189 million in the same period last year by 67%, hitting $316 million. Uber Freight, the division of the company that connects shippers with carriers, also didn’t do well as its own losses also rose up to 161% from $31 million in the same period last year, to $81 million this year.
The company is quite understandably under immense pressure to make a profit or at least cut down on heavy losses as much as possible. Uber went public this year and has been extremely disappointing for its investors. Rival company Lyft has pretty much been in the same boat as it also went public this year but has pulled in significant losses as well.