Sunday, September 27, 2020

    Uber withdraws 2020 financial forecasts, to write down investments by $2.2 bn

    US-based Uber on Thursday said it was withdrawing its financial guidance for 2020, amid "uncertainty" caused by the coronavirus pandemic. The ride-hailing company also warned it expects to write down between $1.9 billion and $2.2 billion from the value of its minority equity investments.


    Ajay Nirmal
    Graduated from Mumbai University, Ajay brings in the latest news across sports, tech, and world news. Ajay loves talking on tech, latest news, and events.

    Uber shares rose as much as 7% in extended trading on Thursday after the company said that it was withdrawing guidance given during its Q4 earnings call and warned that it expects an impairment charge because of declines in investments.

    The company’s ride-sharing and delivery businesses have been affected by the coronavirus pandemic and lockdowns, but Uber has given little guidance on the expected effects. CEO Dara Khosrowshahi said on a call with analysts March 19 that booking declines in Seattle had reached 60% to 70% on an annualized basis.

    Investors may be cheered by the relatively small effect of programs that Uber rolled out to help drivers during the pandemic. The company said it expects that program to reduce GAAP net income by an estimated $17 to $22 million in Q1 and an estimated $60 to $80 million in Q2.

    Uber also said it would take a one-time charge between $1.9 billion and $2.2 billion on the value of equity investments, affecting GAAP net loss by that amount. As of the end of last year, Uber had had stakes in Didi, Grab, Zomato, and its Yandex.Taxi joint venture, according to its annual report.

    Last year, Uber reported $8.51 billion net loss, primarily because of stock-based compensation.

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