Plus500 does not provide its products and services to residents of United States.

Plus500 does not provide its products and services to residents of United States.

72% of retail CFD accounts lose money.

Menu

How Will Uber Stock Prices React to Q1 Earnings?

Plus500 | Thursday 06 May 2021

Uber (UBER) announced Q1 earnings yesterday and showed mixed results, with better than expected earnings per share, but a miss on revenue predictions. Gross bookings, which include both passenger-related and food-related orders, were at an all-time high of $19.5 billion. Before yesterday’s earnings report, Uber stock closed the trading day down by nearly 3.4%, which could also be due in part to an announcement by the Biden administration that they would block a Trump ruling affecting gig workers.

Uber

Uber’s numbers may reflect how the COVID-19 pandemic continues to affect different segments of the company’s business. Ride-hailing continues to see a negative impact, while food deliveries remain strong. Total revenue came in at $2.9 billion for the quarter, which was significantly below the $3.28 billion projected by analysts. Still, earnings, while showing a modest $0.06 loss per share, handily beat Wall Street’s $0.56 loss per share forecasts.

Revenue from the ride segment showed an additional 10% loss as U.K. drivers were reclassified as employees instead of independent drivers in March. This meant that Uber needed to set aside $600 million to pay minimum wage salaries and holiday expenses for these workers. The company also advised that it would take a lower cut from U.S. driver earnings beginning in the second quarter in order to encourage more drivers to work as the U.S. economy continues to grow. 

Bookings in Uber’s ride segment remained flat when compared to Q4 2020, and were down by 38% from Q1 2020. On the bright side, revenue from Uber Eats was up by 28% from the previous quarter and had more than tripled over the same period last year.

Uber also detailed plans to work with GoPuff, a startup backed by SoftBank (9984.TY), to deliver essentials to expand its Uber Eats service menu. Search volumes for convenience items have grown by 40% since January, and the new partnership could make Uber more competitive with Amazon (AMZN).

Lyft Announced Positive Q1 Earnings on Tuesday

In other transportation news, Uber’s competitor Lyft (LYFT) announced its Q1 earnings on Tuesday and was able to beat analyst forecasts on both earnings per share and revenue. The company brought in $609 million in revenue compared to an expected $559 million, and had losses of $0.35 per share instead of the projected EPS of $0.53. Revenue was down 36% from a year ago when the pandemic was beginning to take hold, but was up 7% from the last quarter. Lyft traded down by almost 6.3% the day after earnings were released.

Uber and Lyft are two examples of how the pandemic has both hurt and helped businesses that heavily rely on transport. It remains to be seen if the economic recovery will bring in greater revenues for both companies in the future.


Get more from Plus500

Expand Your Knowledge

Videos & Articles help you expand your trading knowledge.

Prepare Your Trades

Our Economic calendar helps you explore global market events.

Trade Without Surprises

Understand the full costs of your trades now for better expense management later.


This information is written by Plus500 Ltd. The information is provided for general purposes only, and does not take into account any personal circumstances or objectives. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. No representation or warranty is given as to the accuracy or completeness of this information. It does not constitute financial, investment or other advice on which you can rely. Any references to past performance, historical returns, future projections, and statistical forecasts are no guarantee of future returns or future performance. Plus500 will not be held responsible for any use that may be made of this information and for any consequences that may result from such use. Hence, any person acting based on this information does so at their own discretion. The information has not been prepared in accordance with legal requirements designed to promote the independence of investment research.

Cryptocurrency CFDs are not available to Retail Clients.

Need Help?
24/7 Support