Market Overview

Uber's Shares Rise More Than 8% Even As Company Withdraws 2020 Guidance

Uber's Shares Rise More Than 8% Even As Company Withdraws 2020 Guidance

The shares of Uber Technologies Inc. (NYSE: UBER) surged in the after-hours session on Thursday, even as the company withdrew its earnings guidance for the financial year 2020.

What Happened

Uber said that the guidance issued during the 2019 fourth-quarter earnings report is no longer valid due to the global uncertainty caused by the novel coronavirus (COVID-19) pandemic.

The ride-hailing company expects a program to help drivers cope up with the financial impact of the pandemic to reduce its GAAP net income by $17 million to $22 million in the first quarter and $60 million to $80 million in the second quarter.

Uber also said it also expects to take an impairment charge against some of its minority investments between $1.9 billion to $2.2 billion in the first quarter.

The San Francisco-based company didn’t mention which investments it expected to take the loss from, but the company has minority holdings in companies Grab, Zomato, and Didi.

Uber’s write-off from the driver aid program is lower than what many analysts had expected, Bloomberg noted, something that likely sent the stock soaring on Thursday.

The company’s primary business is severely impacted by the pandemic, as the demand for rides has decreased due to lockdown orders imposed by authorities to curb the spread of the coronavirus. Instead, the demand for its food delivery service has increased.

Price Action

Uber's shares traded 8.4% higher at $29.30 in the after-hours session on Thursday. The stock closed the regular session 1.4% lower at $27.03.

Photo Credit: Public domain image via Wikimedia.


Related Articles (UBER)

View Comments and Join the Discussion!

Posted-In: Bloomberg Coronavirus Covid-19 GrabEarnings News Tech Best of Benzinga