Uber loses $5 billion, misses Wall Street targets despite easing price war

Uber Technologies Inc reported a $5.2 billion loss and revenue that fell short of Wall Street targets on Thursday as growth in its core ride-hailing business slowed, sending its shares down 6%.

Uber's net loss, up from a loss of $878 million a year earlier, reflected $3.9 billion of stock-based compensation expenses related to its IPO earlier this year, and Wedbush analyst Ygal Arounian said its loss before interest, tax, depreciation and amortization was in line with Wall Street targets.

Still, he said, "So far, mostly everything is below expectations."

The figures caught investors off guard because smaller rival Lyft Inc on Wednesday had raised revenue expectations and described an easing price war, sending up shares of both companies during regular trade on Thursday.

Uber shares fell 5% after hours on Thursday and Lyft dropped about half a percent. Uber had risen more than 8% and Lyft had gained 3% during the day.

Uber reported that revenue growth slowed to 14%, and the company's core business, ride-hailing, grew revenue only 2% to $2.3 billion. If not for a 72% rise in revenue from food delivery unit Uber Eats, revenue would have dropped. Total revenue fell short of the average analyst estimate of $3.36 billion, according to IBES data from Refinitiv.

Gross bookings, a measure of total value of car rides, scooter and bicycle trips, food deliveries and other services before payments to drivers, restaurants and other expenses, rose 31% from a year earlier to $15.76 billion. Analysts on average were expecting $15.80 billion.

At the same time, Uber is keeping less money per car ride. The amount passengers spent on trips rose 20% while the amount Uber kept after paying its drivers increased just 4%.

Chief Executive Officer Dara Khosrowshahi said in a press call the competitive environment is starting to rationalize and it has been "progressively improving" since the first quarter.

Lyft on Wednesday said pricing had become "more rational", meaning the company should spend less on promotions and incentives to win market share. It raised its revenue outlook on Wednesday.

Uber's Khosrowshahi said the company is making its decision separate from Lyft.

Both the companies have historically relied on subsidization to attract riders and have been spending heavily to expand services into areas such as self-driving technology for Lyft and food delivery for Uber.

Uber's costs rose 147% to $8.65 billion in the quarter, including a sharp rise in spending for research and development.

"While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction," Chief Financial Officer Nelson Chai said in a statement.

The company, which has not yet made clear whether it will make a profit, is trying to convince investors that growth will come not only from its ride services, but also from other logistics and food delivery services.

Uber said its monthly active users rose to 99 million globally, from 93 million at the end of the first quarter and 76 million a year earlier.

source: news.abs-cbn.com

Nokia disappoints with deep loss, slumping sales

HELSINKI - Nokia, which until recently was the world's biggest mobile phone maker, reported a much worse-than-expected second quarter loss Thursday as it presses on with a massive restructuring of its faltering business.

The Finnish company's continued strong cash position was meanwhile met with relief by investors, sending its stock soaring more than 15 percent after the announcement.

Nokia's chief executive Stephen Elop acknowledged in the earnings statement that the April-June period had been "a difficult quarter".

In the second quarter, Nokia posted a net loss of 1.41 billion euros ($1.74 billion), about four times their loss of 368 million euros during the same period a year earlier and more than double the loss anticipated by analysts.

Analysts polled by Dow Jones Newswires had expected Nokia to post a net loss of 654 million euros for the quarter.

Shipments of new smartphones failed to make up for dwindling overall sales, which fell 19 percent from the second quarter of 2011 to 7.54 billion euros, but nonetheless beat analyst expectations that the company would rake in merely 7.24 billion.

Nokia, which recently lost its ranking of 14 years as the world's biggest mobile phone maker, dramatically changed its strategy a year and a half ago when chief executive, Stephen Elop, warned it was "standing on a burning platform" and needed to immediately shift course.

The Finnish company's new strategy involved phasing out its Symbian smartphones in favour of a partnership with Microsoft.

That alliance has produced a first line of Lumia smartphones, which Nokia is counting on to help it survive in a rapidly changing landscape marked by stiff competition from RiM's Blackberry, Apple's iPhone and handsets running Google's Android platform.

The company said it had shipped four million Lumia phones during the quarter, stressing that it had surpassed expectations in the United States.

This did not however stop Nokia earlier this month from having to slash the price of its Lumia 900 by half to just $50 after only three months in stores. And Nokia's new flagship smartphone took a hit when Microsoft recently warned that existing Lumia handsets would not be able to run its Windows 8 upgrade.

Elop stressed though that the company believed an upcoming "Windows Phone 8 launch will be an important catalyst for Lumia."

Ari Hakkarainen, an analyst with Andalys OY, however insisted Thursday this was "hopeful thinking," pointing out that even with strong software, Nokia and Microsoft will have a hard time breaking into the media products market (offering TV shows, e-books and music) dominated by the likes of Apple and Google.

"Without the whole ecosystem they cannot catch up with the others," he said.

Strategy Analytics analyst Neil Mawston told Dow Jones Newswires: "Pretty much every arrow points in the wrong direction as it has for a long time," adding though that the slight uptick in the North America market was positive, as was the stabilisation of Nokia's feature phone sales.

The company itself acknowledged Thursday that it "expects the third quarter 2012 to be a challenging quarter in Smart Devices due to product transitions."

Nokia has issued three profit warnings in a little over a year, and last month it announced new big spending cuts and another 10,000 job cuts would be needed on top of the some 12,000 cuts already announced since the shift.

While the company is struggling, it still has a strong cash position, and although a dividends payment sent its net cash holdings down compared with the first quarter to 4.2 billion euros, it stressed it had more available money than a year ago.

This unexpectedly well-padded safety net sent its stock up 15.24 percent to 1.58 euros in early afternoon trading on the Helsinki stock exchange, which was up 0,97 percent.

That is still a far cry from the more than 8.0 euros investors were paying for each of its shares just before Elop announced the massive restructuring a year and a half ago.

The company, which in 2008 enjoyed more than 40 percent of the global mobile phone market, was already struggling to maintain its leading position when it entered the Microsoft partnership.

Nokia no longer provides its global market share figures, but has reportedly now seen the number drop below 20 percent.

source: interaksyon.com