Uber forecasts first quarterly profit by end of the year

NEW DELHI: Uber Technologies said it will deliver a first-ever quarterly profit by the end of the year, signalling that cost-cutting measures are exceeding even the company’s own recent expectations. The company will become profitable, on an adjusted basis, by the fourth quarter of 2020, Dara Khosrowshahi, the chief executive officer, said on a conference call to discuss financial results on Thursday. A previous plan set this goal for 2021. The stock was up about 5% in extended trading.
The drive toward profitability is likely to take a toll on growth. Nelson Chai, the chief financial officer, said gross bookings will decline slightly in the first quarter from the previous period.
For the fourth quarter, Uber edged out Wall Street’s expectations, with bookings up 28% and a loss that was narrower than analysts’ estimates. Gross bookings for the fourth quarter were $18 billion, showing demand for transportation and food delivery orders remains strong. The measure, which represents the total value of rides, food orders and other businesses, is closely watched by investors.
Efforts to rein in spending are proving to be especially effective. The San Francisco-based company reported an adjusted loss of $615 million, compared with a $713 million average of analysts’ estimates compiled by Bloomberg. The loss, which excludes interest, taxes and other expenses, was $817 million in the same quarter a year earlier.
Uber is trying to more closely connect its various services and increase usage among the more than 100 million customers who open the app each month.