Uber pulls back from operating profit target – TechCrunch

Uber is walking back its guidance for what was supposed to be a milestone year for the ride-hailing company that included reaching an operating profit by the last quarter.

Uber said Thursday it was withdrawing its 2020 guidance for gross bookings, adjusted net revenue and adjusted EBITDA, which were provided on February 6, 2020 during the company’s earnings call.

“Given the evolving nature of COVID-19 and the uncertainty it has caused for every industry in every part of the world, it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results,” Uber said in a statement.

After a disappointing initial public offering in May 2019 and several months in retreat, Uber CEO Dara Khosrowshahi set out to reduce costs by cutting its workforce and selling its food delivery service in India to competitor Zomato . It appeared that the cost-cutting was working and Khosrowshahi moved up guidance, saying that Uber planned to make an operating profit by the final quarter of 2020. The company had previously targeted 2021 to reach an operating profit.

Uber also warned that it expected an impairment charge of between $1.9 billion and $2.2 billion because of declines in value on some of its minority equity investments. Uber has minority stakes in Didi, Grab, Yandex.Taxi and Zomato, according to its latest annual report. The one-time charge is not expected to impact Uber’s first-quarter adjusted net revenue, adjusted EBITDA, cash and cash equivalents or short-term investments, the company said.

Uber also used Thursday’s change in guidance to highlight initiatives it launched in response to the COVID-19 pandemic, including a financial assistance program for drivers and delivery people.

Uber said it plans to account for this program as Contra Revenue, which will likely reduce GAAP revenue by an estimated $17 million to $22 million in the first quarter and an estimated $60 million to $80 million in the second quarter. Uber will exclude the impact of certain COVID-19-specific expenses from Adjusted Net Revenue and from Adjusted EBITDA to “help investors assess the impact of COVID-19 on our financial position.”

The company has scheduled its first quarter earnings call for 1:30 pm PT May 7.

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